Financial statement impact of finance lease: *

1 point

a. Assets will be lower

b. Liabilities will be lower

c. Net income in early years will be higher

d. Net income in the later years will be higher

Which of the following is not an indication that large corporations dependency on foreign exchange market is increasing day by day *

1 point

a. By some estimates about 40 percent of S&P 500 Index earnings are from outside the United States

b. The pricing for domestic assetsequities, bonds, real estate, and othersalso depend on demand from foreign investors

c. Investors are shedding their home bias and are investing in foreign markets

d. Overall earnings are increasing due to increased inflation, which is still lower than local interest rates

Which of the following is not an advantage of leasing? *

1 point

a. Payment schedules are more flexible than loan contracts.

b. After-tax costs are lower because tax rates are different for the lessor and the lessee.

c. Leasing involves separation of ownership and control (maintenance) of asset.

d. For an operating lease, the company will create an expense instead of a liability, allowing the company to obtain financial funding often referred to as off-balance sheet financing.

A land in Bashundhara is leased by the ministry of foreign affairs, BD. The land has a useful life of 120 years and the government authority has decided to lease it for 85 years. This is an example of: *

1 point

a. Operating lease

b. Finance lease

c. Ownership

d. Rental agreement

Theres a potential political turmoil in our hands in the coming months. If we decide to calculate value of a new company in November the resulted enterprise value will be lower than usual. Then main reason is higher required rate of return on capital (WACC). Why could WACC go up in November? *

1 point

a. Cost of debt will go up as interest rates rise

b. Cost preferred stock will go up due to exposed risk

c. Cost of equity will go up as shareholders are most exposed to undiversifiable risk

d. WACC will go up due to lower tax rate

Which one(s) is (are) true? *

1 point

a. The real exchange rate can be defined as the nominal exchange rate that takes the inflation differentials among countries into account

b. An increase in the real exchange rate implies a reduction in the relative purchasing power of the domestic currency

c. Both statements are true

Which of the following instrument has the highest impact on forex turnover *

1 point

a. Spot

b. OTC forwards

c. Exchange traded derivatives

d. Swaps

APS textiles BD LTD has some investments in USA. Recently the exchange rate between BDT and USD is fluctuating on a random basis. To reduce the exchange rate risk of USD investment, APS can: *

1 point

a. Sell BDT spot

b. Buy USD forward

c. Sell USD forward