What is optimal distribution policy?

Q: What is par value?

A: Stockholders’ equity is the measure of assets staying in a business after the sum total of the…

Q: What is the benefits and draw backs of long straddle strategy?

A: A long straddle is when the investor buys both a call and a put option on the same stock, with the…

Q: Under what conditions is a market-based transfer price most likely to be used?

A: Transfer Pricing: It is termed as the cost which is charged by the one department of the company…

Q: What is horizon value?

A: Horizon value is the value of the project or the security at the end of a specified future date. The…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: What is market model?

A: A market model is a numerical portrayal of the exchanges among different members, financial powers,…

Q: What is levered beta?

A: Levered beta: Levered beta monitors the company’s risk with equity and debt in its structure of…

Q: Define target distribution ratio

A: Distribution ratio: Distribution ratio is defined as the proportion of the diverse constituents in…

Q: Describe the Sensitivity Analysis for Mutually Exclusive Alternatives?

A: Sensitivity analysis portrays how various values of an independent factor under a given arrangement…

Q: What is feasible set?

A: When investors manage their ‘financial assets’, like ‘bonds’, ‘shares’ and other financial…

Q: What does maturity matching mean, and what is the logic behindthis policy?

A: Maturity matching It is a financing strategy for working capital. Under this strategy, financing of…

Q: What is market multiple method?

A: The market multiple methods is a hypothesis of valuation, in view of the reason that comparative…

Q: What is indifference curve?

A: Indifference curve: It is a diagram indicating a mix of two items that give equivalent fulfillment…

Q: What does ROI measure?

A: Return on Investment: Return on Investment is a profitability measure which determines a company's…

Q: What are the benefits of netting?

A: Answer Defination:- Netting is a process by which an exposure or obligation is reduced by combining…

Q: What is the risk free return?

A: Rate of return is the return percentage which an investor gets from the money which has been…

Q: What is Market Value Added (MVA)?

A: The market value added is the difference of the current value of the company and the equity capital…

Q: Whatis a yield curve?

A: It is the percentage of the securities at which the return is provided by the company to its…

Q: What is normal yield curve?

A: The yield curve is a curve that shows the many yields to maturity and interest rates. The curve also…

Q: What are input flexibility options and output flexibility options?

A: The question is based on the concept of production process. The managers can use variation in Input…

Q: What stages are involved in planning complex supply negotiations?

A: Negotiation:   It is a trade process that covers the period e=when the first communication is made…

Q: What is net present value (NPV) profile?

A: Net present value profile is mainly the graphical representation of net present value of different…

Q: What is offer price?

A: Bid price is the maximum price which the buyer is willing to pay to purchase. In other words, it…

Q: Under what conditions is a market-based transfer price optimal?

A:

Q: Define each of the following terms:a. Optimal distribution policy

A: Distribution policy: A company policy outlining how to communicate and distribute the messages…

Q: What is market price?

A: The price for the business is the prevailing demand for the purchase or selling of an asset or…

Q: What is flexibility option?

A: A financial instrument that provides the opportunity to the buyer and seller to purchase and sell…

Q: What are some types of real options?

A: Real options is defined as a capital budgeting decision with which the management may make a future…

Q: What is target pricing? Who uses it?

A: Target pricing: A pricing method which is used to identify the price at which the product will be…

Q: how do I calculate the PV factor?

A: PV factor is the present value of future cash flow of $1 after n years.

Q: Explain CMO Price Behavior and Prepayment Rates?

A: The question is based on the concept of Collateralized Mortgage Obligations (CMO) , interest rate…

Q: How do flexibility options affect projects’ NPVs and risk?

A: Fluctuations factors such as demand, interest rate levels are common which may affect future…

Q: Explain Expectations Theory?

A: Expectations theory attempts to predict what short-term interest rates will be in the future based…

Q: What is market efficiency?

A: Market Efficiency term is taken from a paper written by Eugena Fama in 18970. Fama acknowledges that…

Q: what is single index model?

A: Single index model refers to the asset pricing model that can be used to measure the risk and return…

Q: maximization goal?

A: According to standard theory of the firm, profit maximization is taken into account to be the…

Q: What is the meaning of Resource Market?

A: In business terms, anything which acts as input and contributes to the production process refers to…

Q: Pricing Strategy

A: Answer: Pricing strategy refers to the method by which companies use to fix the prices for their…

Q: What is market portfolio?

A: A pool of investments that comprises of all the available investment opportunities across the globe…

Q: What is hurdle rate?

A: Hurdle rate a rate usually used in capital budgeting decisions to calculate the acceptability of a…

Q: Outline the rules for identifying the optimal transfer price.

A: Transfer pricing:- Transfer pricing is considered as the value that is attached to those goods and…

Q: what is the risk-free rate (rf)?

A: Risk free rate is also called as treasury bill rate. This treasury bill rates are free from default…

Q: What is value at risk, VaR?

A: Value at Risk (VaR) is a financial metric that estimates the risk of an investment. More…

Q: What is a strategy map?

A: The strategy map:The strategy map is a valuable tool that graphically demonstrates the cause and…

Q: What is the difference between smart beta ETFS and index ETFS?

A: Smart beta exchange traded funds (ETFS) is a systematic approach which gives the advantage of active…

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.