QUESTION: 5

At the time of renewal of working capital limits by a bank, the loan officer observed that M/s ABC utilization of funds on a long term basis is 80% of the long term sources during the year. Which among the following would be the result of this kind of financial management?

The current liabilities would increase
The current assets would decline
The current ratio would decline
The current ratio would improve

Answer(s): C

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QUESTION: 6

Which one of the following has not caused the huge growth in hedge funds and private equity?

Financial institutions looking for a better rate of return
The freedom of hedge fund managers to use innovative methods of investing to increase returns
Tough financial regulations which promote greater investment and therefore better returns
Private investors seeking better returns

Answer(s): C

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