MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
*/*_The constant growth model of equity valuation assumes that _____________.? |
| A. | the dividends paid by the company remain constant |
| B. | the dividends paid by the company grow at a constant rate of growth |
| C. | the cost of equity may be less than or equal to the growth rate |
| D. | the growth rate is less than the cost of equity. |
| Answer» C. the cost of equity may be less than or equal to the growth rate | |
| 2. |
*/*_Financial management is indispensable in any organization as it helps in______________.? |
| A. | taking sound financial decisions |
| B. | proper use and allocation |
| C. | improving the profitability of funds |
| D. | all the above |
| Answer» E. | |
| 3. |
*/*_Which of the following statement are true in respect of working capital?? |
| A. | Gross Working Capital is the sum of the total current assets |
| B. | Net working capital represents current assets - current liablities |
| C. | Net working capital can be negative |
| D. | All the above |
| Answer» E. | |
| 4. |
*/*_Liquidity risk_____________.? |
| A. | is the risk that investment bankers normally face |
| B. | is lower for small OTCEI stocks than for large NSE stocks |
| C. | is the risk associated with secondary market transactions |
| D. | increases whenever interest rates increase. |
| Answer» E. | |
| 5. |
*/*_Retained earnings are ?? |
| A. | an indication of a company's liquidity |
| B. | the same as cash in the bank |
| C. | not important when determining dividends |
| D. | the cumulative earnings of the company after dividends. |
| Answer» E. | |
| 6. |
*/*_If the Dow Jones Industrials had a price appreciation of 6 percent one year and yet Total return for the year was 11 percent; the difference would be due to___________.? |
| A. | the tax treatment of capital gains |
| B. | the cumulative wealth effect |
| C. | dividends |
| D. | profits |
| Answer» D. profits | |
| 7. |
*/*_A method of inventory recording which produces high inventories in balance sheet is classified as? |
| A. | First out receivable |
| B. | First in first out |
| C. | Last in first out |
| D. | last out receivable |
| Answer» C. Last in first out | |
| 8. |
*/*_Lottery payoffs and payment for rental apartments are examples of? |
| A. | lump sum amount |
| B. | deferred annuity |
| C. | annuity due |
| D. | payment fixed series |
| Answer» D. payment fixed series | |
| 9. |
*/*_A type of security payment in which payments are made at equal intervals of time and each payment amount is same is classified as? |
| A. | fixed interval investment |
| B. | fixed payment investment |
| C. | annuity |
| D. | lump sum amount |
| Answer» D. lump sum amount | |
| 10. |
*/*_An interest rate which is quoted by brokers, banks and other financial institutions is classified as? |
| A. | annuity rate |
| B. | perpetuity rate |
| C. | nominal rate |
| D. | external rate of return |
| Answer» D. external rate of return | |
| 11. |
*/*_In calculation of time value of money, 'PMT' represents? |
| A. | present money tracking |
| B. | payment |
| C. | payment money tracking |
| D. | future money payment |
| Answer» C. payment money tracking | |
| 12. |
*/*_An investment outlay cash flow is Rs 2000, an operating cash flow is Rs 1500 and salvage cash flow is Rs 3000 then free cash flow would be? |
| A. | Rs 500.00 |
| B. | Rs 2,500.00 |
| C. | Rs 650.00 |
| D. | Rs 6,500.00 |
| Answer» E. | |
| 13. |
*/*_Project which is started by firm for increasing sales is classified as? |
| A. | new expansion project |
| B. | old expanded project |
| C. | firm borrowing project |
| D. | product line selection |
| Answer» B. old expanded project | |
| 14. |
*/*_Free cash flow is Rs 15000, operating cash flow is Rs 3000, investment outlay cash flow is Rs 5000 then salvage cash flow will be? |
| A. | Rs 17,000.00 |
| B. | -Rs 17,000.00 |
| C. | Rs 7,000.00 |
| D. | -Rs 7,000.00 |
| Answer» D. -Rs 7,000.00 | |
| 15. |
*/*_Long period of bond maturity leads to? |
| A. | more price change |
| B. | stable prices |
| C. | standing prices |
| D. | mature prices |
| Answer» B. stable prices | |
| 16. |
*/*_The ___________ is a window through which the investor can see the company.? |
| A. | Syndicate offer |
| B. | IPO |
| C. | Prospectus |
| D. | Shelf rule. |
| Answer» D. Shelf rule. | |
| 17. |
*/*_Which of the following is not an objective of financial management?? |
| A. | Maximization of wealth of shareholders |
| B. | Maximization of profits |
| C. | Mobilization of funds at an acceptable cost |
| D. | Ensuring discipline in the organization. |
| Answer» E. | |
| 18. |
*/*_A group of mutual funds with a common management are known as______________.? |
| A. | fund syndicates |
| B. | fund conglomerates |
| C. | fund families |
| D. | fund complexes |
| Answer» D. fund complexes | |
| 19. |
*/*_An unmanaged fixed income security portfolio handled by an independent trustee is known as a______________.? |
| A. | junk bond fund |
| B. | closed-end investment company |
| C. | unit investment trust |
| D. | hedge fund |
| Answer» E. | |
| 20. |
*/*_Shares having no face value are known as? |
| A. | no par stock |
| B. | at par stock |
| C. | equal stock |
| D. | debt equity stock |
| Answer» B. at par stock | |
| 21. |
*/*_The company’s average cost of capital is ____________.? |
| A. | the average cost of equity shares and debentures |
| B. | the average cost of equity preference shares |
| C. | the average cost of shares and all sources of long-term funds |
| D. | the average cost of short term funds |
| Answer» D. the average cost of short term funds | |
| 22. |
*/*_Present value takes _________.? |
| A. | Discounting rate |
| B. | Compounding rate |
| C. | Inflation rate |
| D. | Deflation rate |
| Answer» B. Compounding rate | |
| 23. |
*/*_A type of project whose cash flows would not depend on each other is classified as? |
| A. | project net gain |
| B. | independent projects |
| C. | dependent projects |
| D. | net value projects |
| Answer» C. dependent projects | |
| 24. |
*/*_Economists consider effects of started project on other parts of company or on environment of company is called? |
| A. | externalities |
| B. | foreign effects |
| C. | weighted effects |
| D. | opportunity effects |
| Answer» B. foreign effects | |
| 25. |
*/*_Operating leverage x financial leverage= _____.? |
| A. | Combined Leverage |
| B. | Financial Combined Leverage |
| C. | Operating Combined Leverage |
| D. | Fixed leverage |
| Answer» D. Fixed leverage | |
| 26. |
*/*_Nominal interest rates and nominal cash flows are usually reflected the? |
| A. | inflation effects |
| B. | opportunity effects |
| C. | equity effects |
| D. | debt effects |
| Answer» B. opportunity effects | |
| 27. |
*/*_Beta measures the ___________.? |
| A. | Investment risk rate |
| B. | Financial risk |
| C. | Market risk |
| D. | Market and finance risk |
| Answer» D. Market and finance risk | |
| 28. |
*/*_Weighted average cost of debt, preferred stock and common equity is classified as? |
| A. | cost of salvage |
| B. | cost of interest |
| C. | cost of taxation |
| D. | cost of capital |
| Answer» E. | |
| 29. |
*/*_Savings accounts are___________ but are not__________.? |
| A. | negotiable; liquid |
| B. | marketable; liquid |
| C. | liquid; personal |
| D. | liquid; marketable |
| Answer» E. | |
| 30. |
*/*_Net working capital is the excess of current asset over ____________.? |
| A. | Current liability |
| B. | Net liability |
| C. | Total payable |
| D. | Total liability |
| Answer» B. Net liability | |
| 31. |
*/*_When a company uses increased fixed cost for production, this is an example of what type of leverage.? |
| A. | operating leverage |
| B. | financial leverage |
| C. | variable cost leverage |
| D. | combined leverage |
| Answer» B. financial leverage | |
| 32. |
*/*_A company having easy access to the capital markets can follow a ____________ dividend policy? |
| A. | liberal |
| B. | formal |
| C. | strict |
| D. | Varying |
| Answer» B. formal | |
| 33. |
*/*_If bond's call provision is practiced in first year of issuance then an additional payment is classified as? |
| A. | issuance provision |
| B. | bond provision |
| C. | call provision |
| D. | First provision |
| Answer» D. First provision | |
| 34. |
*/*_Redemption option which protects investors against rise in interest rate is considered as? |
| A. | redeemable at deferred |
| B. | redeemable at par |
| C. | redeemable at refund |
| D. | redeemable at finding |
| Answer» C. redeemable at refund | |
| 35. |
*/*_Price per ratio is divided by cash flow per share ratio which is used for calculating? |
| A. | dividend to stock ratio |
| B. | sales to growth ratio |
| C. | cash flow to price ratio |
| D. | price to cash flow ratio |
| Answer» E. | |
| 36. |
*/*_The value of EBIT at which EPS is equal to zero is known as ____________.? |
| A. | Break-even point |
| B. | Financial break-even point |
| C. | Operating break-even point |
| D. | Overall break-even point |
| Answer» C. Operating break-even point | |
| 37. |
*/*_Wages and salaries of employees which company owns in this accounts are called? |
| A. | accrued expenses |
| B. | accruals accounts |
| C. | Both A and B |
| D. | zero liabilities |
| Answer» D. zero liabilities | |
| 38. |
*/*_A computerized trading network that matches buy and sell orders electronically entered by customers is a___________.? |
| A. | national markets system |
| B. | electronic communications networks |
| C. | internet investment service |
| D. | global investment network. |
| Answer» C. internet investment service | |
| 39. |
*/*_The Markowitz model assumes most investors are_____________.? |
| A. | risk averse |
| B. | risk neutral |
| C. | risk seekers |
| D. | risk moderators |
| Answer» B. risk neutral | |
| 40. |
*/*_A market interest rate for specific type of bond is classified as bonds? |
| A. | required rate of return |
| B. | required option |
| C. | required rate of redemption |
| D. | required rate of earning |
| Answer» B. required option | |
| 41. |
*/*_An efficient market hypothesis states all public information which is reflected in current market prices is classified as? |
| A. | weak form efficiency |
| B. | strong form efficiency |
| C. | market efficiency |
| D. | semi strong efficiency |
| Answer» E. | |
| 42. |
*/*_In capital asset pricing model, stock with high standard deviation tend to have? |
| A. | low variation |
| B. | low beta |
| C. | high beta |
| D. | high variation |
| Answer» C. high beta | |
| 43. |
*/*_Rational traders immediately buy stock when price is? |
| A. | too low |
| B. | too high |
| C. | conditional |
| D. | inefficient portfolio |
| Answer» B. too high | |
| 44. |
*/*_Input call parity relationship, put option minus call option in addition with stock is equal to? |
| A. | exercise price present value |
| B. | exercise price future value |
| C. | time line value |
| D. | time value of bond |
| Answer» B. exercise price future value | |
| 45. |
*/*_Ability to trade at net price very quickly is classified as? |
| A. | original trading |
| B. | liquidity |
| C. | offline trading |
| D. | fixed price trading |
| Answer» C. offline trading | |
| 46. |
*/*_Market value of the shares are decided by ____________.? |
| A. | the respective companies |
| B. | the investment market |
| C. | the government |
| D. | shareholders |
| Answer» C. the government | |
| 47. |
*/*_Call provision practiced by company which states that call price will be paid is classified as? |
| A. | super refund provision |
| B. | super put redemption |
| C. | make-whole call provision |
| D. | super call provision |
| Answer» D. super call provision | |
| 48. |
*/*_An outstanding bonds are also classified as? |
| A. | standing bonds |
| B. | outdated bonds |
| C. | dated bonds |
| D. | seasoned bonds |
| Answer» E. | |
| 49. |
*/*_Bond call provision that is not practiced even after several years of issuance is classified as? |
| A. | original provision |
| B. | deferred call |
| C. | deferred provision |
| D. | permanent provision |
| Answer» C. deferred provision | |
| 50. |
*/*_Premium which is considered as difference of expected return on common stock and current yield on Treasury bonds is called? |
| A. | current risk premium |
| B. | past risk premium |
| C. | beta premium |
| D. | expected premium |
| Answer» B. past risk premium | |