List-A List-B a. A lender buys securities to protect him from a falling interest rate 1. Interest rate collar b. A borrower buys securities to protect himself from rising interest rate 2. Interest rate cap c. A combination of interest rate cap and floor 3. Interest rate corridor d. A combination of two or more […]

List-I (Statement) List-II (Terms) a. Preventing hostile takeover 1. Management buyout b. Leveraged buyout 2. Green mail c. Accounting for merger 3. Pooling of interest d. Financing for merger 4. Cash offer

List – I (Statement) List – II (Term) I. A combination of two puts and one call with the same exercise price and expiration date. 1. Strap II. A combination of one put and two calls with the same exercise price and expiration date. 2. Strip III. A portfolio of put and call with the […]

List – I List – II (a) Rate of discount which equates the net present value to zero. (i) Payback period (b) Ratio of present value of cash inflows to the cash outflow. (ii) Internal Rate of Return (c) Percentage of annual net income earned on average fund invested in a project (iii) Profitability Index […]

List – I  (Functions of Finance) List – II (Significance) a. Financial Statements  1. Check on Financial Activities b. Administration of Tax 2. Reduction of Tax Liability c. Internal Audit 3. Allocation of Fund d. Budgeting 4. Income Statement

List – I List – II i. Net income approach for capital structure a. Modigliani, M. and Miller M.H.   ii. Net operating income approach for capital structure   b. Robert Bruner   iii. Irrelevance of capital structure for the value of the firm. c. Ezra Soloman iv. FRICT analysis for capital structure d. David […]

List – I List – II i. Sale of existing firm to the management a. Reverse synergy ii. Financing acquisition with substantial secured borrowings b. Management buyout iii. Firms demerged worth more to other firms c. Reverse capital budgeting iv. Cash inflows on demerger at present at the sacrifice in form of cash out-flow on […]

List – I List – II i. Concentration Banking a. William J. Baumol ii. Optimum cash balance under certainty b. Cash collection technique iii. Playing the float c. Miller M.H. and Orr D iv. Optimum cash balance under uncertainty d. Cash disbursement technique

(i) Net present value method I. Inflow after interest and tax (ii) Average rate of return II. Discounted cash flow (iii) Internal rate of return III. Traditional method (iv) Pay back method IV. Decision based on cut-off rate

List – I List – II a. Net present value i. Number of years required to recover the original cash outlay invested in a project. b. Payback period ii. It is the rate of return which equates the present value of anticipated net cash flows with the initial outlay. c. Internal rate of return   […]