Tag: business organisation

Questions Related to business organisation

Deep financial market is ________________________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. The market which attracts funds in large volume

  2. The market that attracts funds from all types of investors.

  3. The underdevelopment market due to government regulations

  4. The market that provides opportunities for sufficient orders at suitable interest rates below and above the market price.

  5. The market that has easy effective interlinkages between its various parts and sub-parts.

Show answer
Correct Option: D
Explanation:

`Deep market is one where there are always sufficient orders for buying and selling at fine quotations, both below and above the market price, and where there are good opportunities for swap deals.

Giving excess protection to domestic markets, which have high entry barriers for foreign firms, over valuation of exchange indicates the adoption of _________ by the country?

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Inward oriented strategy

  2. Inflation control

  3. Liberalization

  4. Outwards oriented strategy

  5. Export promotion strategy

Show answer
Correct Option: A
Explanation:

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy.

The factors responsible for integration of financial markets are ___________________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Increased cross penetration of foreign ownership.

  2. Liberalization of regulations governing the financial markets

  3. The development of new financial instruments

  4. All of the above

  5. Both (A) and (C) above

Show answer
Correct Option: D
Explanation:

Integration of financial markets involves the freedom and opportunity to raise funds from and to invest anywhere in the world, through any type of instrument. All the given factors are responsible for Integration of financial markets. 

The net liquidation value of a firm is the best indicator of its financial health. This is the proposal of ____________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Beaver model

  2. L C Gupta model

  3. Wilcox model

  4. Altman's Z score model

  5. None of the above

Show answer
Correct Option: C
Explanation:

Wilcox proposed that the net liquidation value of the firm is the best indicator of its financial health. The net liquidation value can be obtained by the difference in liquidation value of a firms assets and the liquidation value of its liabilities.

The long-term investment of a firm involves __________________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Irreversible investments

  2. Investments which benefit the firm for number of years

  3. All of the above

  4. None of the above

Show answer
Correct Option: C
Explanation:

Long-term decisions involve setting up of the firm, expansion, diversification modernization and other similar capital expenditure decisions requiring huge investment made by raising long-term sources, the benefits of which can be seen only in the long term. Because of the huge investments involved these decisions are irreversible.

The intermediary between the customers and suppliers who perform financing and debt collection services is called a ________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Bank

  2. Factor

  3. Mutual fund

  4. NBFC

  5. Merchant Banker

Show answer
Correct Option: B
Explanation:

Factoring is a financial service under which the factor undertakes collection, accounting and management of the client's debt. Thus the factor is an intermediary between the supplier and the customers who performs financing and debt collection services.

An industrial company which has at the end of any financial year accumulated losses greater than its net worth is said to be _______________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Bankrupt

  2. Sick

  3. Weak

  4. Both (A) and (C) above

  5. None of the above

Show answer
Correct Option: B
Explanation:

Sick industrial company is company registered for not less than five years which has to the end of any financial year, accumulated losses equals to or exceeding its entire net worth.

Deregulation and globalization of the financial markets increase the volatility in ___________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Internal rates

  2. Exchange rates

  3. Prices of financial assets

  4. All of the above

  5. Both (A) and (B) above

Show answer
Correct Option: D
Explanation:

The most important and visible effect of globalization and integration of financial markets is the increase in volatility in:
1. Interest rates
2. Exchange rates &
3. Prices of financial assets change quite frequently in response to various changes taking place in different segments of the financial markets  all over the world.

The strategy of laying stress on domestic production which is usually adopted by developing countries is called as ________________.

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. Open economy strategy

  2. Growth oriented strategy

  3. Inward oriented strategy

  4. Export substitution strategy

  5. None of the above

Show answer
Correct Option: C
Explanation:

The strategy adopted by the developing countries to strengthen the domestic industries by an providing lot of protection to domestic industry in the form of heavy tarrifs/ restrictions on imports is called the inward oriented strategy. Thus the main feature of the inward oriented strategy is to lay stress on domestic production.

Delhi is often described as a 'cosmopolitan' city. This means that it ____________

business organisation introduction to financial markets concept of financial market meaning and definition of financial market concepts and functions of financial markets

  1. is the principal city

  2. is a city of great wealth

  3. is a city with a global reputation

  4. is a city with an ethnically diverse population

Show answer
Correct Option: D
Explanation:

A cosmopolitan city is a city that has a high diversity of population with the high number of population with a better life style than a village which suggests that it is a city of great wealth too.