Question : Which of the following statements is true?

Option 1: Interest on debentures is calculated at fixed rate on its nominal (face) value payable quarterly, half yearly or yearly as per the terms of issue.

Option 2: Rate of interest is prefixed to the debenture, is payable even if the company incurs a loss.

Option 3: Interest on debentures is a charge against profit.

Option 4: All of the above 

Question : Which of the following statements is not true?

Option 1: Interest on debentures is a charge against a profit of the company and is payable whether the company earns a profit or incurs a loss.

Option 2: Interest on debentures is calculated at a fixed rate of interest on the nominal (face) value.

Option 3: Interest is payable on debentures issued as collateral security.

Option 4: Balance in Debentures' Interest Account is transferred to Statement of Profit and Loss (Finance Cost) at the end of the year.

Question : Which of the following statements is not true?

Option 1: Interest on debentures is a charge against a profit of the company and is payable whether the company earns a profit or incurs a loss.

Option 2: Interest on debentures is calculated at a fixed rate of interest on the nominal (face) value.

Option 3: Interest is payable on debentures issued as collateral security.

Option 4: Balance in Debentures' Interest Account is transferred to Statement of Profit and Loss (Finance Cost) at the end of the year.

Question : The effective annual Rate of Interest corresponding to a nominal rate of interest of 13% per annum payable half-yearly is:

Option 1: 26%

Option 2: 26.85%

Option 3: 13%

Option 4: 13.42%

Question : What is the effective annual rate of interest corresponding to a nominal rate of 10% per annum payable half-yearly?

Option 1: 10.25%

Option 2: 12.75%

Option 3: 9.25%

Option 4: 11.50%