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Q:

what is crossover rate?

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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Subject: Finance

Q:

What is RAROC?

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.

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Subject: Finance

Q:

What is the difference between real money & nominal money?

Answer

Nominal money relates more to it's measure of counting - so nominal figure of what is written on bill, while "real" relates more to it's purchasing power (usually between some periods of time). For instance 100 units in nominal could buy 2 units of good in 1950 and 1 unit of good in 2005, at the same time real value of this 100 nominal units are 100 real units in 1950 and 50 real units in 2005.


Same is with GDP. In nominal it can rise due to inflation while it can stay the same or even decrease in real value.

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Subject: Finance

Q:

What is Trial Balance?

Answer

It is statement of balances of all the accounts in the ledger prepared to prove the arithmetical accuracy of the books of accounts.


A trial Balance is a list of Debit and Credit or a list of Debit & Credit Balance of all the ledger accounts prepared on any particular date

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Subject: Finance

Q:

Who is a more senior creditor, a bondholder or stockholder?

Answer

According to the classification, the claim of bond holder should be accounted first. After fulfilling all the claims of bond holder company should look after the stock holder.

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Subject: Finance

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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Subject: Finance

Q:

What is the difference between JOURNAL ENTRY & LEDGER?

Answer

A journal is also called as a book of prime entry.Transactions occurred are first entered in this book to show which accounts should be debited and which should be credited.


on the basis of entries made in the journal, accounts are prepared, the book which contains the accounts is called a ledger. Transactions entered in the journal are classified according to their nature and posted in their respective accounts in ledger. it is also called as book of final entry.

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Subject: Finance

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