Question

What is the significance of a company's strong financial strength and goodwill in the context of fixed deposits?

a.

Companies with strong financial strength offer lower interest rates.

b.

Companies with strong financial strength may pay less interest.

c.

Companies with strong financial strength are more likely to disappear.

d.

Companies with strong financial strength are considered safe for fixed deposit investors.

Posted under IC 89 Management Accounting

Answer: (b).Companies with strong financial strength may pay less interest. Explanation:Companies with strong financial strength may pay less interest, and the weaker ones are forced to offer a little more reward (interest) to compensate investors for the extra risks.

Interact with the Community - Share Your Thoughts

Uncertain About the Answer? Seek Clarification Here.

Understand the Explanation? Include it Here.

Q. What is the significance of a company's strong financial strength and goodwill in the context of fixed deposits?
Add Comment

Similar Questions

Explore Relevant Multiple Choice Questions (MCQs)

Q. What is solvency, and how does it relate to the safety of fixed deposits?

View solution

Q. Why is due diligence important for investors considering company fixed deposits?

View solution

Q. What distinguishes bank deposits from company deposits in terms of guarantees?

View solution

Q. What is the main purpose of a mutual fund?

View solution

Q. What is the role of unit-holders in a mutual fund?

View solution

Q. What risk factors are associated with mutual fund investments?

View solution

Q. How have Indian mutual funds been organized?

View solution

Q. What is the requirement for the relationship between the fund sponsor, trustees, custodian, and Asset Management Company in a mutual fund?

View solution

Q. What are some advantages of mutual funds?

View solution

Q. What risk factor is associated with mutual funds and securities investments?

View solution

Q. What types of ratios are used for evaluating the performance of mutual funds?

View solution

Q. What is the definition of AIF (Alternative Investment Fund)?

View solution

Q. What are some types or nature of AIFs?

View solution

Q. How can an AIF raise funds?

View solution

Q. What is the definition of a venture capital fund?

View solution

Q. What is the definition of a venture capital undertaking?

View solution

Q. What is the characteristic of Term Insurance plans?

View solution

Q. What is the purpose of Whole Life insurance policies?

View solution

Q. What is the primary purpose of an endowment life insurance policy?

View solution

Q. How is Group Insurance defined?

View solution
View All MCQs on IC 89 Management Accounting

Recommended Subjects

Are you eager to expand your knowledge beyond IC 89 Management Accounting? We've handpicked a range of related categories that you might find intriguing.

Click on the categories below to discover a wealth of MCQs and enrich your understanding of various subjects. Happy exploring!

Cytogenetics

Delve into the genetic mysteries of chromosomes with our Cytogenetics category....

Drug and Pharmaceutical Biotechnology

Navigate the world of pharmaceuticals and biotechnology with our dedicated category....

Human Anatomy and Physiology

Embark on a journey through the human body with our Human Anatomy and Physiology...

Environmental Biotechnology

Discover the intersection of biology and environmental science with our Environmental...

Corrosion Engineering

Master the art of preventing material deterioration with our Corrosion Engineering...

Logical Reasoning

Enhance your logical thinking and decision-making abilities with our Logical...

Professional Communication

Hone your communication skills with our Professional Communication category. Enhance...

Mass Transfer

Delve into the science of Mass Transfer with our specialized category. Explore...

Fluid Mechanics

Unlock the mysteries of fluids and their behavior with our Fluid Mechanics category....