Final Revision I

Which of the following refers to the minimum annual percentage required to attract investors to buy or hold securities?

• Market rate of return

• Expected rate of return

• Weighted average cost of capital

• Required rate of return

Which of the following refers to a stream of equal payments at fixed intervals that is expected to continue forever?

• Annuity

• Perpetuity

• Future value

• Present value

Which of the following represents the risk that a country's government will make a sudden change on the government policies?

• Portfolio risk

• Emergency risk

• Financial risk

• Political risk

Which of the following refers to the investor who has a preference for risk and tends to investment in greater volatility and uncertainty investment?

• Risk seeker

• Risk neutral

• Risk averse

• Risk diversify

Which of the following refers to the risk that arises when there is an attempt to diversify the company's investment into different investment alternatives such as bond, stock, mutual fund and others?

• Business risk

• Investment risk

• Portfolio risk

• Emergency risk

Which of the following refers to a series of equal payments at fixed intervals for a specified number of periods such as instalment payments?

• Annuity

• Perpetuity

• Future value

• Present value

Which of the following refers to the risk of uncertainty about the impact of factors beyond the control of financial management of project income such as natural disasters?

• Portfolio risk

• Emergency risk

• Business risk

• Political risk

Which of the following refers to the probability that an actual return on an investment will be lower than the expected return?

• Return

• Future value

• Risk

• Perpetuity

The concept of time value of money indicates a dollar received today is worth more than the dollar to be received tomorrow.

• compound interest

• time value of money

• future value annuity

• present value annuity

Which of the following is NOT the measurement of risk and return?

• Expected rate of return

• Standard deviation

• Mean

• Co-variance