SECTION A MULTIPLE CHOICE QUESTIONS Read the questions caref

SECTION A: MULTIPLE CHOICE QUESTIONS Read the questions carefully and choose the BEST answer out of the POSSIBLE answers provided. 1. The three broad categories of financial assets are: A. Debt, equity and money market securities B. Corporate securities, derivatives and equity C. Debt, equity and derivatives D. Long-term debt and equity and money market securities 2. Which of the following takes place at the declining stage of the industry life cycle? A. Firm operations get more stable and dependable B. Rapid growth in demand and subsequent profits occur C. Costs get stable rather than decreasing or increasing D. Sales growth decline as new products are developed 3. Which of the following is a characteristic of cyclical stock? A. Their value is tied with the overall state of the national economy. B. They are low-priced, speculative and risky securities. C. They have stable earnings and no extensive liabilities D. None of the given options 4. All of the following are the analytical factors revolving around stock, EXCEPT: A. Growth rates B. Inflation rates C. Firm cash flows D. Ratio analysis Which of the following estimates are needed while applying fundamental analysis to the market? 5. A. Earnings and dividends B. Stream of shareholder benefits C. Required return or earnings multiple D. All of given options

Solution

1)

A financial asset is a non-physical asset creates its based-on bonds, market interest rates, stock value and other market driving forces. Value of financial assets changes with change in market conditions.

Hence, correct option is (A) Debt, Equity and money market securities.