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- Question
Demand is said to be inelastic when
Options- A. Percentage change in demand is less than the percentage change in price of the good
- B. Percentage change in demand is greater than the percentage change in price of the good
- C. Percentage change in demand is equal to the percentage change in price of the good
- D. None of the above
- Correct Answer
- Percentage change in demand is less than the percentage change in price of the good
ExplanationDemand is said to be inelastic, when the demand for the good doesn't change much or it is negotiable when the price of the good changed.
- 1. Financial management process deals with
Options- A. Financing decisions
- B. Investments
- C. Both A & B
- D. None of the above Discuss
- 2. Explain the difference between fixed and flexible budgets ? Discuss
- 3. Galloping inflation is also known as
Options- A. Hyperinflation
- B. Jumping inflation
- C. Moderate inflation
- D. None Discuss
- 4. Diversification is important in investing because
Options- A. It ensures that you only make low-risk investments.
- B. It helps you to balance your risk across different types of investments.
- C. It helps you gain the highest rate of return despite any risks.
- D. It increases your overall risk, which guarantees that you will make more money. Discuss
- 5. Someone who loans money is called
Options- A. Lender
- B. Borrower
- C. Investee
- D. Investor Discuss
- 6. RBI issued currency notes under which system
Options- A. Maximum Fiduciary System
- B. Proportional Reserve System
- C. Fixed Fiduciary System
- D. Fixed Minimum Reserve System Discuss
- 7. Comprehensive income includes all of the following except
Options- A. expenses
- B. contributions by owners
- C. extraordinary items
- D. losses Discuss
- 8. Cheque deposited but not cleared means Discuss
- 9. What is RAROC? Discuss
- 10. what is crossover rate? Discuss
Finance problems
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Correct Answer: Financing decisions
Explanation:
Financial management refers to the efficient and effective management of money (funds) in such a manner as to accomplish the objectives of the organization. It is the specialized function directly associated with the top management.
Hence, it deals with Financial decisions.
Correct Answer: 1 A fixed budget is established for a specific level of activity whereas flexible budget is prepared for various levels of activity 2 Fixed budget cannot be changed after the period commences, whereas a flexible budget can be changed after the period commence 3 Fixed budget is more suitable for fixed expenses whereas flexible budget takes both fixed as well as variable expenses in account 4 Fixed budget includes only fixed costs, whereas a flexible budget includes fixed costs, variable costs and semi variable costs 5 Fixed budget is mainly used in planning stage whereas flexible budget is used in controlling stage
Correct Answer: Jumping inflation
Explanation:
Galloping inflation is also known as jumping inflation.
It refers to a type of inflation that occurs when the prices of goods and services increase at the two-digit or three-digit rate per annum.
Correct Answer: It helps you to balance your risk across different types of investments.
Correct Answer: Lender
Explanation:
Someone who receives money in exchange for a promise to pay it back later is called a borrower1, and the person making the loan is the lender.
Correct Answer: Fixed Minimum Reserve System
Explanation:
RBI issued currency notes under Fixed Minimum Reserve System.
Correct Answer: contributions by owners
Explanation:
Comprehensive income is the sum of net income and other items that must bypass the income statement because they have not been realized, including items like an unrealized holding gain or loss from available for sale securities and foreign currency translation gains or losses.
Correct Answer: A Bank Reconciliation Statement is a statement prepared periodically by a customer to explain the divergence (difference) between the bank balance as per cash book and the bank balance as per Pass Book It clearly shows the two differing balances and the outstanding items which causes the balances to disagree The objective of preparing such a statement is to know the causes of differences between the two balances and pass necessary correcting or adjusting entries in the books of the firm But it is to be noted that some differences are automatically adjusted For example - A cheque that has been sent for collection, but not yet collected, causes a difference between the balance as shown by the pass book and the balance as shown by the cash book, but no adjusting entry is required in the cash book for such a difference because, the bank will credit the firm?s account as soon as the cheque is collected
Correct Answer: RAROC is a risk-adjusted framework for profitability measurement and profitability management It is a tool for measuring risk-adjusted financial performance And it provides a uniform view of profitability across businesses (Strategic Business Units / divisions) RAROC and related concepts such as RORAC and RARORAC are mainly used within (business lines of) banks and insurance companies RAROC is defined as the ratio of risk-adjusted return to economic capital
Correct Answer: Crossover rates have to do with the amount of earnings that are generated by two different but similar projects The crossover rate is the point at which the two projects achieve the same net present value In terms of investments, calculating a crossover rate between two similar securities can help an investor determine what to buy and what to sell
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