Match List - I with List - II : Choose the correct answer from the options given below :List - I (Item) List - II (Description) A. Par value I. Specified interest rate B. Maturity period II. Number of years after which the value is payable to holders C. Coupon rate III. Amount by which a bond sells at a value higher than par value D. Premium IV. Value on the face of the bond
This question requires matching financial terms related to bonds found in List - I with their correct descriptions in List - II. Let's break down each item:
Matching Bond Terms: A Detailed Explanation
We need to correctly associate each term from List - I (A, B, C, D) with its corresponding description in List - II (I, II, III, IV).
A. Par Value Explained
Par value, also known as face value, is the nominal value or dollar value of a security stated by the issuer. For bonds, it's the amount paid to the bondholder at maturity. It's the value printed on the face of the bond certificate.
Therefore, Par value matches with: IV. Value on the face of the bond.
B. Maturity Period Explained
The Maturity period of a bond is the length of time until the bond issuer has to repay the principal amount to the bondholder. It's the lifespan of the bond.
Therefore, Maturity period matches with: II. Number of years after which the value is payable to holders.
C. Coupon Rate Explained
The Coupon rate is the annual interest rate paid on a bond, expressed as a percentage of the bond's face value (par value). This is the fixed interest payment the bondholder receives.
Therefore, Coupon rate matches with: I. Specified interest rate.
D. Premium Explained
A Premium occurs when a bond's market price is higher than its par value. This usually happens when the bond's coupon rate is higher than the prevailing market interest rates.
Therefore, Premium matches with: III. Amount by which a bond sells at a value higher than par value.
Correct Matching Summary
Based on the explanations above, the correct matching is:
- A matches with IV
- B matches with II
- C matches with I
- D matches with III
This corresponds to the combination A-IV, B-II, C-I, D-III.
Important Questions from Business Finance
Match List I with List II
List I
List II
Option strategies
Description(s)
A.
Protective put
I.
Buying an asset along with a put on it
B.
Covered call
II.
Buying a call as well as put options on an asset at the same exercise price
C.
Long straddle
III.
Combining two or more options on the same asset with differing exercise prices or times to maturity
D.
Spread
IV.
Writing a call position on an asset along with buying the asset
Choose the correct answer from the options given below:
In order to shorten its operating cycle, a manufacturing company focuses on which of the following decisions ?
A. Reducing operating expenses
B. Enhanced coordination of firm activities
C. Manufacturing automation
D. Longer production schedule
E. Tightening credit policy
Choose the correct answer from the options given below:
Match List I with List II:
List I
List II
A.
Margin of Safety I.
Profit × sales/PV Ratio B.
Break Even Point II.
Difference between total revenue and total variable costs C.
P V Ratio III.
Total Sales-Total Variable Cost / Total Sales D.
Contribution IV.
Equality between contribution and total fixed costs.
Choose the correct answer from the options given below:Identify the components of the credit policy of a business firm from the following:
A. Collection policy
B. Factoring
C. Credit rating
D. Credit analysis
E. Terms of sale
Choose the correct answer from the options given below:
A new issue debt or shares will invariably involve floatation costs in the form of:
(A) Legal fees
(B) Administrative expenses
(C) Brokerage
(D) Underwriting
(E) Risk premium
Choose the most appropriate answer from the options given below:
