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Differentiate between compound interest and discounting.
Why is the money given time value?
Explain in brief about the time value of money?
Discuss risk from the perspective of the CAPM (Capital Asset Pricing Model).
How much more demand of return is appropriate for a share of common stock by risk-averse investors, when compared to a Treasury bill?
The risk-averse investor will pay off for risk when he will take on an investment project. Explain
Explain the terms: diversifiable and non-diversifiable risk. Which one is more important to financial managers in business firms?
Explain in brief the non-diversifiable risk and ways to measure it?
What happens if the correlation coefficient for two variables is -1 or 0 or +1?
What will be the effect on riskiness of a portfolio if assets with negative correlations (even very low correlations) are taken together?
The riskiness of portfolios should be looked at in a different way than the riskiness of individual assets. Explain.
Explain in brief the difference between financial risk and business risk?
What is the reason that variation coefficient mostly considered a better risk measure while comparing different projects than the standard deviation?
Explain the concept of the risk–return relationship.
Explain in brief the risk aversion? If the common stockholders are risk averse, then they will mostly invest in risky companies. Explain.
What are the actions to be taken when the analysis of pro forma financial statements shows positive trends or Negative trends?
What are the interest areas for financial managers when they go through pro forma financial statements?
What is the significance of the term additional funds needed?
Explain in brief the way to incorporate management goals into pro forma financial statements.
Explain the cash budget and the capital budget relation to pro forma financial statements.
What types of conflict can occur when groups vie for resources?
Describe the sales forecasting process.
Explain the main motive behind the experience approach to forecasting?
Businesses spend their time, effort and money in producing forecasts. Explain
Why financial ratio analysis requires trend analysis and industry comparison?