Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Strategic Financial Management Total Number of Question: 40 Time: 41 Minutes Please check your email after completion of test for result. All the best... Name Phone No Email Area Pin Code 1. The Capital Asset Pricing Model (CAPM) is used to estimate: The intrinsic value of a stock The expected return of an asset based on its risk The break-even point of a company The credit rating of a bond None 2. Diversification helps to reduce which type of risk? Systematic risk Unsystematic risk Inflation risk Interest rate risk None 3. Which theory states that investors should maximize return for a given level of risk Arbitrage Pricing Theory Modern Portfolio Theory (MPT) Efficient Market Hypothesis Gordon Growth Model None 4. Beta measures a stock’s sensitivity to: Company-specific risk Market risk Liquidity risk Interest rate fluctuations None 5. The correlation between two perfectly negatively correlated assets is: 0 +1 -1 0.5 None 6. Which type of exchange rate system is determined by supply and demand forces? Fixed exchange rate Floating exchange rate Pegged exchange rate Dual exchange rate None 7. Which instrument is commonly used to hedge currency risk? Forward contract Mutual fund Commercial paper Treasury bond None 8. Purchasing Power Parity (PPP) theory explains the relationship between: Inflation and exchange rates Interest rates and stock prices GDP and unemployment Corporate tax rates and foreign investmen None 9. Which of the following is a measure of a country’s overall economic transactions with the rest of the world? Balance of Payments (BoP) Fiscal Deficit Monetary Policy Inflation Index None 10. Which international financial institution provides short-term loans to countries facing balance of payments problems? World Bank International Monetary Fund (IMF) Asian Development Bank (ADB) Bank for International Settlements (BIS) None 11. Which type of merger occurs between companies in unrelated industries? Horizontal merger Vertical merger Conglomerate merger Market-extension merger None 12. Which financial strategy is used to avoid hostile takeovers? Leveraged Buyou Poison Pill Joint Venture Asset Securitization None 13. In an acquisition, the company being purchased is known as the: Acquirer Target company Holding company Subsidiary None 14. Which of the following is not a reason for corporate restructuring? Reducing operational inefficiencies Expanding into new markets Increasing financial leverage Increasing working capital needs None 15. Which strategy involves selling off a part of a company to focus on core business areas? Divestiture Merger Acquisition Conglomerate Expansion None 16. Which financial derivative provides the right but not the obligation to buy or sell an asset? Future Swaps Options Forward contracts None 17. What is the main advantage of using futures contracts? Customization No counterparty risk Guaranteed profits No margin requirements None 18. Which of the following best describes a "swap" in finance? Exchange of cash flows Buying a put option Selling a bond Merging two companies None 19. Which type of option can only be exercised at expiration? European option American option Asian option Bermudan option None 20. Hedging with derivatives is primarily used to: Reduce financial risk Maximize returns Eliminate all risks Increase market exposure None 21. Which financial market deals with newly issued securities? Primary market Secondary market Money market Forex market None 22. Which of the following is a short-term financial instrument? Debenture Commercial paper Equity share Mutual fund None 23. The stock market is an example of which type of market? Derivative marke Capital market Money market Commodity market None 24. What is the role of SEBI in the financial market? Regulate and protect investor interests Issue government bonds Control exchange rates Provide short-term loans to businesses None 25. Which financial institution is primarily responsible for monetary policy in India? SEBI RBI IRDAI NABARD None 26. A company in India imports goods worth $50,000. The spot rate is ₹82/USD, and the 3-month forward rate is ₹83/USD. If the company decides to hedge its exposure using a forward contract, what will be its total payment in INR? ₹4,100,000 ₹4,150,000 ₹4,000,000 ₹4,200,000 None 27. A trader expects the USD/INR spot rate to increase from ₹82/USD to ₹85/USD. If they buy a call option with a strike price of ₹83/USD, what will be their profit per USD if the option premium is ₹1.50? ₹2.50 ₹3.00 ₹1.50 ₹0.50 None 28. A US investor holds an Indian bond worth ₹1,000,000. If the current exchange rate is ₹82/USD and depreciates to ₹85/USD, what will be the loss in USD? $365 $588 $3,659 $4,120 None 29. A futures contract on gold has a spot price of ₹5,000 per gram and a futures price of ₹5,200 per gram. If an investor buys 10 grams, what is the total profit or loss if the spot price at maturity is ₹5,300 per gram? ₹1,000 profit ₹1,500 profit ₹500 loss ₹1,000 loss None 30. An investor buys a put option with a strike price of ₹100, an option premium of ₹5, and the stock price falls to ₹90 at expiry. What is the investor's profit per share? ₹10 ₹5 ₹-5 (loss) ₹15 None 31. A company hedges its fuel costs using futures contracts. If it locks in a price of ₹80 per liter and the market price rises to ₹90 per liter, what is the hedging gain per liter? ₹10 ₹5 ₹0 ₹15 None 32. A project requires an initial investment of ₹500,000 and generates annual cash flows of ₹150,000 for 5 years. If the discount rate is 10%, what is the NPV? ₹47,725 ₹53,620 ₹72,915 ₹65,430 None 33. A machine costs ₹200,000 and has a salvage value of ₹20,000 after 5 years. If the annual depreciation using the straight-line method is calculated, what is the yearly depreciation? ₹40,000 ₹36,000 ₹42,000 ₹38,000 None 34. A project has an initial outlay of ₹400,000 and generates ₹120,000 annually for 4 years. What is the Payback Period? 3.33 years 3.75 years 4.00 years 3.50 years None 35. If Stock A has a return of 12% with a weight of 40% and Stock B has a return of 8% with a weight of 60%, what is the portfolio return? 9.2% 9.6% 10.4% 8.8% None 36. If Stock A has a beta of 1.2 and Stock B has a beta of 0.8, what is the portfolio beta if both are equally weighted? 1.0 1.1 1.2 0.9 None 37. If a stock has a standard deviation of 15% and a correlation with the market of 0.7, while the market's standard deviation is 10%, what is the stock’s beta? 1.05 1.10 1.15 1.20 None 38. If a portfolio consists of two stocks with a correlation of -1, what happens to total risk? No change Risk is minimized Risk increases Risk is eliminated None 39. A bond pays a 5% annual coupon and has a market price of ₹1,100. If the face value is ₹1,000, what is its current yield? 4.55% 5.00% 5.45% 4.90% None 40. Which type of portfolio strategy involves adjusting asset allocation based on market trends? Passive Management Tactical Asset Allocation Buy and Hold Index Investing None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test. Look out for results and future opportunities. Stay Connected !! Your quiz time is about to finish. Few seconds left. Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
