Practice Test

Q1) Project appraisal by financial institution takes into consideration Show Answer

Q2) A project would normally be undertaken if its net present value is: Show Answer

Q3) The project planning activities and goals include defining: 1. The specific work to be performed and goals that define and bind the project. 2. Estimates to be documented for planning, tracking, and controlling the project. 3. Commitments that are planned, documented, and agreed to by affected groups. 4. Project alternatives, assumptions, and constraints. Select the correct answer from the options given below. Show Answer

Q4) Which of the following is not one of the three fundamental methods of firm valuation? Show Answer

Q5) The promoter's capacity and competence should be examined with reference to - Show Answer

Q6) External sources of finance do not include: Show Answer

Q7) Which of the following is a drawback to a business that issues debentures? Show Answer

Q8) Internal sources of finance do not include: Show Answer

Q9) Technical feasibility implies to mean - Show Answer

Q10) The project is viable when BCR is Show Answer

Q11) Financial aspects of project is judged with reference to - Show Answer

Q12) The objective of economic appraisal is to - Show Answer

Q13) The social analysis consists of - Show Answer

Q14) The UNIDO guidelines provide a comprehensive framework for - Show Answer

Q15) ................... are those which are created by combining the features of equity with bond, preference and equity. Show Answer

Q16) Zero Coupon bonds are bonds issued at ................... and redeemed at par. Show Answer

Q17) A ................... lowers the interest rate risk by neutralizing the inflation risk. Show Answer

Q18) Derivatives include a variety of financial contracts, including ................... (1) Futures; (2) Forwards; (3) Swaps; (4) Options. Select the correct answer from the options given below. Show Answer

Q19) ................................ means any instrument in the form of a depository receipt created by Domestic Depository in India against the underlying equity shares of a company incorporated outside India. Show Answer

Q20) IDR is an instrument denominated in - Show Answer

Q21) Depository Receipt (DR) is ................... 1. Denominated in foreign currency. 2. Traded in foreign exchanges. Select the correct answer from the options given below. Show Answer

Q22) Depository receipts can be issued by way of Show Answer

Q23) ................................means modes of raising funds by an Indian company outside India in foreign currency. Show Answer

Q24) Which of following is government security? Show Answer

Q25) Floating rate bonds are bonds with ................... Show Answer

Q26) A bond that allows the issuer of the bond to redeem the bond before the date of maturity is called as ................... Show Answer

Q27) A bond which has a provision that allows the holder of the bond the right to force the issuer to pay back the principal on the bond is called as - Show Answer

Q28) Capital Indexed Bonds are bonds where interest rate is a fixed percentage over the ................... Show Answer

Q29) Z Ltd. issued CP as per the following details: Date of issue - 17th January, 2010 Date of maturity - 17th April, 2010 Interest rate - 11.25% p.a. Amount received is - 9.73 Crore. At what amount this CP will be redeemed? Show Answer

Q30) A company issues 90 days commercial papers of the face value of Rs.1,000 at Rs.980. The credit rating expenses are 0.6% of the size of issue, issuing and paying agent charges are 0.25% and stamp duty is to be paid @ 0.20%. You are required to calculate cost of issuing commercial papers. Show Answer

Q31) The .....................is the financing of long-term infrastructure, industrial projects and public services based upon a non-recourse or limited recourse financial structure, in which project debt and equity used to finance the project are paid back from the cash flow generated by the project, without any claims (with some very specific exceptions) on the companies that develop these projects. Show Answer

Q32) ..................... ..................... .....................is a loan structure that relies primarily on the project’s cash flow for repayment, with the project’s assets, rights and interests held as secondary security or collateral1 Show Answer

Q33) Project finance, comes from a combination of both equity and ...................... Show Answer

Q34) ..................... ..................... defines the project activities and end products that will be performed and describes how the activities will be accomplished. Show Answer

Q35) The project planning activities and goals include defining Show Answer

Q36) A ..................... .....................is a formal, approved document that is
used to manage and control a project.
Show Answer

Q37) The project planning process consists of the following basic tasks:. Show Answer

Q38) The project report is an extremely important aspect of the project. Show Answer

Q39) .....................is a working plan for implementation of project proposal after investment decision by a company has been taken Show Answer

Q40) There is no prescribed format for the preparation of a project report - but a project report should contain mainly the following set of information in general: Show Answer

Q41) Timing for project appraisal is most important consideration for all types of appraisers. Show Answer

Q42) Under inflationary conditions, the appraisal of the project generally be done keeping in view the following guidelines: Show Answer

Q43) Project appraisal under inflationary and deflationary conditions can be done using same approach. Show Answer

Q44) Project appraisal, in general, by the financial institutions seek to consider inter alia the following aspects:: Show Answer

Q45) Viability Tests includes: Show Answer

Q46) .....................involves studying the feasibility of selected technical processes and its suitability under Indian conditions, Location of the project, Plant layout, appropriateness of the chosen equipment, machinery and technology, availability of raw material, power and other inputs, appropriateness of technology chosen from social point of view, availability of infrastructure for the project, the techno economic
assumptions and parameters used for analyzing costs and benefits and viability provision for treatment of effluents, training of manpower, legal requirement on documentation, license and registration.
Show Answer

Q47) The primary aim of .....................is to determine whether the project satisfies the investment criteria of generating acceptable level of profitability Show Answer

Q48) ............is the basis for financial analysis. Show Answer

Q49) In the last year, the inflow is .....................due to the residual value adding to the cash inflow. Show Answer

Q50) What are the measures of Financial Viability Rs. Show Answer

Q51) .....................representing wealth creation by the Project, is calculated by taking the discounted sum of the stream of cash flows during the project life. Show Answer

Q52) When tv/o or more mutually exclusive projects are being appraised, the project with the .....................NPV should be selected. Show Answer

Q53) ..................... is the ratio of discounted value of benefit and discount value of cost. Show Answer

Q54) The project is viable when BCR is one or more than ..................... Show Answer

Q55) .....................represents the returns internally generated by the project. Show Answer

Q56) This is also the rate which makes the net present value equal to 0. Show Answer

Q57) The calculation of .....................is a process of trial and error Show Answer

Q58) .....................helps us in finding out that how sensitive is the project to various fluctuations Show Answer

Q59) Under .....................scenario of certain prices, cost and other variables are created and the financial parameters are computed. Show Answer

Q60) Under ....................., probabilistic analysis is done by identification of key risk variables, finding out values of each risk variable, assigning probabilities for each value to each of the risk variables, using these values for risk analysis and finding out the probability of negative outcome of the project. Show Answer

Q61) The objective of economic appraisal is to examine the project from the entire economy’s point of view to determine whether the project will improve the economic welfare of the country Show Answer

Q62) The .....................consists of two parts: measurement of the distribution of the income due to the project and identification of the impact on the basic needs objectives of the society. Show Answer

Q63) The organizational and managerial aspects evaluate the managerial capacity of the organization or the entrepreneur, responsible for implementing the project. Show Answer

Q64) Lending policy and appraisal norms by banks are decided by the ...................... Show Answer

Q65) Bank lending must necessarily be based on principles. Principles includes: Show Answer

Q66) The loan policy typically lays down lending guidelines in the following areas Show Answer

Q67) CRR stands for Show Answer

Q68) SLR stands for Show Answer

Q69) A bank can fend out only a certain proportion of its deposits, since some part of deposits have to be statutorily maintained as ..................... Show Answer

Q70) For new borrowers, a bank usually lays down guidelines regarding minimum rating to be achieved by the borrower to become eligible for the loan. This is also known as the ‘ .....................’ criterion to be achieved by a new borrower. Show Answer

Q71) In the case of term loans and working capital assets, banks take as ‘primary security’ the property or goods against which loans are granted.
In addition to this, banks often ask for additional security or ..................... in the form of both physical and financial assets to further bind the borrower.
Show Answer

Q72) CAR stand for ..................... Show Answer

Q73) .....................is the ratio is the capital with the bank as a Show Answer

Q74) The Basel committee specifies a CAR of at least .....................% for banks.: Show Answer

Q75) The Reserve Bank of India (RBI)has specified a CAR of at least % for banks Show Answer

Q76) What is the exposure norms for Commercial banks in India to a Single Borrower Show Answer

Q77) What is the exposure norms for Commercial banks in India to a Group Borrower Show Answer

Q78) What is the maximum exposure norms for Commercial banks in India to capital market Show Answer

Q79) The Reserve Bank of India has brought a new methodology of setting lending rate by commercial banks under the name ..................... Show Answer

Q80) The ....................._ is an agreement expressed in writing and entered into between the borrower and the lender bank, institution or other creditors Show Answer

Q81) The loan agreement begins with the 'date of execution and description' of the parties to the agreement. Show Answer

Q82) Which of the following statements is not correct with reference to 'Terms of loans' ? Show Answer

Q83) The security clause is not an important clause in the loan agreement. Show Answer

Q84) Project review is a very important aspect of entire project life. Show Answer

Q85) Activities taking place during the Monitoring, Evaluation and Control Phase are : Show Answer

Q86) ___ tracks the operational work of the project Show Answer

Q87) Project monitoring answer the following question : Show Answer

Q88) ___ tends to focus on tracking progress Show Answer

Q89) ___ involves establishing the systems and decision-making process to manage variances between the project plans (in terms of scope, cost, schedule, etc.) and the realities of project implementation. Show Answer

Q90) Strong project design makes it easier to create and align comprehensive monitoring and evaluation systems. Show Answer

Q91) ___ analysis is a systematic and cohesive method to survey all the impacts caused by a project Show Answer

Q92) Social cost-benefit analysis comprises not just the financial effects (investment costs, direct benefits like tax and fees, etc), but all the social effects, like : pollution, safety, indirect (labour) market, legal aspects, etc. Show Answer

Q93) The social cost-benefit analysis calculates : Show Answer

Q94) Which of the following statement is correct ? Show Answer

Q95) Which of the following statement is not correct in relation to social cost benefit analysis ? Show Answer

Q96) Which of the following is the approach for social cost benefit analysis ? Show Answer

Q97) UNIDO Approach analysis the project considering the following aspects ? Show Answer

Q98) The mathematical formulation of L-M approach is identical to the UNIDO method except for differences in assigning value to discount rates and accounting for imperfections and other market failures and social considerations. Show Answer

Q99) Which of the following statement is not correct ? Show Answer

Q100) Which of the following statement is not correct ? Show Answer

Q101) Term loan is a ___ secure debt extended by banks or financial institutions to the corporate sector Show Answer

Q102) Term loan extended by banks or financial institutions to the corporate sector for carrying out their long-term projects maturing between ___ Show Answer

Q103) Term loan is a type of funding which is most suitable for projects involving very heavy investment which is not possible by an individual or promoters Show Answer

Q104) Term loan is acquired for : Show Answer

Q105) Which of the following statement is not correct ? Show Answer

Q106) Project appraisal by financial institution takes into consideration : Show Answer

Q107) The term ___ refers financial investment in a highly risky and growth oriented venture with the objective of earning a high rate of return. Show Answer

Q108) ___ act as an intermediary to link up the sources of ideas and the sources of fund Show Answer

Q109) Off shore VCFs are promoted by ___ & financial institution Show Answer

Q110) High risk is an outstanding feature of ___ Show Answer

Q111) ___ is needed for developing a product in the initial stages. Show Answer

Q112) In hire purchase system, each installment is treated as ___ till the last installment is paid. Show Answer

Q113) ___ is the opinion of the rating agency on the relative ability and willingness of the issuer of debt instrument to meet the debt service obligations as and when they arise. Show Answer

Q114) The features of hire purchase : Show Answer

Q115) Factoring is method of raising ___ finance through account receivable credit offered by commercial banks and factors Show Answer

Q116) The user of an asset in a leasing arrangement is called the : Show Answer

Q117) The owner of an asset in a leasing arrangement is called the : Show Answer

Q118) A lease should evaluate the lease options as against the buying option. Show Answer

Q119) A lease which is generally not cancellable and covers full economic life of the asset is known as : Show Answer

Q120) Non-banking finance companies are engaged in financial services. Show Answer

Q121) A venture capital firm deals with : Show Answer

Q122) In finance lease, leases is responsible for : Show Answer

Q123) Finance lease is also called as : Show Answer

Q124) Operating lease is more or less fully amortised during the primary lease period Show Answer

Q125) Which of the following statement is not correct ? Show Answer

Q126) Most leases in India are : Show Answer

Q127) A ___ represents a contractual arrangement whereby the lessor grants the lessee the right to use an asset in return for periodic lease rental payments Show Answer

Q128) There are two broad types of lease : finance lease and operating lease Show Answer

Q129) Which of the following is not the feature of finance lease ? Show Answer

Q130) Key features of lease finance in India includes : Show Answer

Q131) ___ is a loan or contract that involves an initial deposit, linked to a specific purchase, which is a way of obtaining the use of an asset before payment is completed. Show Answer

Q132) Which of the following statement is not correct ? Show Answer

Q133) ___ is a source of financing for new businesses Show Answer

Q134) Venture capitalist prefers to invest in "entrepreneurial businesses". Show Answer

Q135) ___ is essentially a way to invest in some assets that isn't publicly traded, or to invest in a publicity traded asset with the intention of taking if private Show Answer

Q136) Private equity funds usually invest in : Show Answer

Q137) Private equity consists of investors and funds that make investments directly into private companies or conduct buyouts of public companies that result in a delisting of public equity. Show Answer

Q138) Private equity investments can be through : Show Answer

Q139) ___ refers to a strategy of making equity investments as part of a transaction in which a company, business unit or business assets is acquired from the current shareholders typically with the use of financial leaverage Show Answer

Q140) ___ refers to equity investments, most often minority investments, in companies that are looking for capital to expand or restructure operations, enter new markets or finance a major acquisition without a change of control of the business. Show Answer

Q141) ___ is a broad sub-category of private equity that refers to equity investments made, typically in less mature companies, for the launch, early development, or expansion of a business. Show Answer

Q142) Which of the following statement is not correct ? Show Answer

Q143) In ___ the borrower from one country may seek lenders in other countries in specific currency which need not be of the participant country. Show Answer

Q144) In international financial market, the availability of foreign currency is assured under four main systems :
(a) Euro currency market
(b) Export credit facilities
(c) Bond issues and
(d) Financial institutions Show Answer

Q145) In ___, funds are made available as loans through syndicated Euro credits / instruments known as Floating Rate Notes (FRNs). Show Answer

Q146) The Euro currency market refers to the availability of a particular currency in the international financial market ___ the 'home country' of that currency. Show Answer

Q147) Corporate taxations does not pay a vital role in taking decision of corporate financing. Show Answer

Q148) Which of the following statement is correct ? Show Answer

Q149) To strengthen the startup ecosystem in the country and provide support, the Indian government offers several tax benefits to startups recognized under the National Startup Policy. Show Answer

Q150) Cost escalation results in the increase in project cost for many reasons including : Show Answer

Q151) The ___ decision involves determining the appropriate make-up of the right hand side of the balance sheet. Show Answer

Q152) The___ decision involves a determination of the total amount of assets needed, the composition of the assets, and whether any assets need to be reduced, eliminated, or replaced. Show Answer