Finance Questions

Q:

What is capital structure? What are the principles of capital structure management?

Answer

Capital structure is a term which is referred to be the mix of sources from which the long term funds are required for business purposes which are raised to improve the capital of the company. To fund an organization plan this capital structure is required which is the combination of debt and equity. The management ensures the capital structure accesses which are needed to fund future growth and enhance financial performance. The principles of capital structure management which are essentially required are as follows:-


 


1) Cost Principle


2) Risk Principle


3) Control Principle


4) Flexibility Principle


5) Timing Principle

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Subject: Finance

21 13735
Q:

What is money market?

Answer

A segment of the financial market in which financial instruments with high liquidity and very short maturities are traded. The money market is used by participants as a means for borrowing and lending in the short term, from several days to just under a year. Money market securities consist of negotiable certificates of deposit (CDs), bankers acceptances, U.S. Treasury bills, commercial paper, municipal notes, federal funds and repurchase agreements (repos).

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Subject: Finance

8 8305
Q:

Why one rupee note is signed by the ministry of finance? is governer has the right to sign this note? is there any interference by the RBI?

Answer

Rupess is the currency of our country and only govt has the authority to issue indian currency it has been signed by ministry of finance, all other notes are bearer notes which are signed by governor.


no interference by RBI.


RBI has the right to print currency notes in the country except coins & 1 Re note which are issued by Govt. Thus, it bears the sign of MoF.

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Subject: Finance

1 5104
Q:

Explain derivatives in terms of capital markets ?

Answer

The term derivative indicates that it has no independent value that is its value is entirely derived from the values of the underlying assets. The underlying asset can be securities, commodities , bullion, currency, livestock or anything else.

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Subject: Finance

4 4959
Q:

What is Demat Account? what is the use of it?

Answer

Demat means Dematerialisation of share, in simple it is an account with which a person can trade in security market without which a person cannot buy or sell any share in security market. 

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Subject: Finance

5 4571
Q:

Diversification is important in investing because

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.
 
Answer & Explanation Answer: B) It helps you to balance your risk across different types of investments.

Explanation:
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Filed Under: Finance
Exam Prep: AIEEE , Bank Exams , CAT
Job Role: Analyst , Bank Clerk , Bank PO

1 4347
Q:

Financial management process deals with

A) Financing decisions B) Investments
C) Both A & B D) None of the above
 
Answer & Explanation Answer: A) 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.

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Filed Under: Finance
Exam Prep: AIEEE , Bank Exams , CAT
Job Role: Analyst , Bank Clerk , Bank PO

5 3671
Q:

What is Treasury Bills?

Answer

A Treasury Bill (known as T-Bill) is an instrument of money market, used to finance short term requirements of Government of a country. A T-Bill is issued at a rate lower than the Face value, and redeemed at Face value on maturity, this difference is the rate of interest on T-Bill. This rate of interest is called Risk free Rate of the country.


 

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