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Maximum amount that can be collected as premium as a percentage of face value = ?
- a)20%.
- b)30%
- c)40%.
- d)Unlimited
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Maximum amount that can be collected as premium as a percentage of fac...
As per companies act 2013 there are no limit for amount for collecting premium as a percentage of face value.
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Maximum amount that can be collected as premium as a percentage of fac...
Premium on Face Value
Premium on face value refers to the amount that is paid by the investors over and above the face value of a security. In other words, it is the difference between the market price and the face value of a security. It is usually expressed as a percentage of the face value.
Maximum Amount of Premium
The maximum amount of premium that can be collected as a percentage of face value is unlimited. This means that there is no upper limit on the premium that can be charged on a security. The premium is determined by the market forces of supply and demand.
Factors Affecting Premium
The premium on a security is influenced by various factors such as:
1. Interest Rates: When the interest rates are low, investors are willing to pay a higher premium for securities as they provide a higher yield.
2. Credit Rating: The credit rating of a company or a security affects the premium as investors are willing to pay more for securities with a high credit rating.
3. Market Conditions: The supply and demand of securities in the market also affect the premium.
4. Time to Maturity: The time to maturity of a security also influences the premium as investors are willing to pay a higher premium for securities with a longer maturity period.
Conclusion
In conclusion, the maximum amount of premium that can be collected as a percentage of face value is unlimited. The premium on a security is determined by various factors such as interest rates, credit rating, market conditions, and time to maturity.
Premium on face value refers to the amount that is paid by the investors over and above the face value of a security. In other words, it is the difference between the market price and the face value of a security. It is usually expressed as a percentage of the face value.
Maximum Amount of Premium
The maximum amount of premium that can be collected as a percentage of face value is unlimited. This means that there is no upper limit on the premium that can be charged on a security. The premium is determined by the market forces of supply and demand.
Factors Affecting Premium
The premium on a security is influenced by various factors such as:
1. Interest Rates: When the interest rates are low, investors are willing to pay a higher premium for securities as they provide a higher yield.
2. Credit Rating: The credit rating of a company or a security affects the premium as investors are willing to pay more for securities with a high credit rating.
3. Market Conditions: The supply and demand of securities in the market also affect the premium.
4. Time to Maturity: The time to maturity of a security also influences the premium as investors are willing to pay a higher premium for securities with a longer maturity period.
Conclusion
In conclusion, the maximum amount of premium that can be collected as a percentage of face value is unlimited. The premium on a security is determined by various factors such as interest rates, credit rating, market conditions, and time to maturity.
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Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer?
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Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer?.
Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Maximum amount that can be collected as premium as a percentage of face value = ?a)20%.b)30%c)40%.d)UnlimitedCorrect answer is option 'D'. Can you explain this answer?.
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