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. |
Present value takes _________. |
| A. | iscounting rate |
| B. | ompounding rate |
| C. | nflation rate |
| D. | eflation rate |
| Answer» B. ompounding rate | |
| 2. |
___________ are financial assets. |
| A. | onds |
| B. | achines |
| C. | tocks |
| D. | and C |
| Answer» E. | |
| 3. |
Financial leverage measures ____________. |
| A. | ensitivity of EBIT with respect of % change with respect to output |
| B. | variation in the level of production |
| C. | ensitivity of EPS with respect to % change in level of EBIT |
| D. | o change with EBIT and EPS |
| Answer» D. o change with EBIT and EPS | |
| 4. |
Beta measures the ________. |
| A. | nvestment risk rate |
| B. | inancial risk |
| C. | arket risk |
| D. | arket and finance risk |
| Answer» D. arket and finance risk | |
| 5. |
Cost of retained earnings is equal to _______. |
| A. | ost of equity |
| B. | ost of debt |
| C. | ost of bank loan |
| D. | ost of term loans |
| Answer» B. ost of debt | |
| 6. |
Which of the following would be considered a risk-free investment? |
| A. | old |
| B. | quity in a house |
| C. | igh-grade corporate bonds |
| D. | reasury bills |
| Answer» E. | |
| 7. |
The company’s average cost of capital is ____________. |
| A. | he average cost of equity shares and debentures |
| B. | he average cost of equity preference shares |
| C. | he average cost of shares and all sources of long-term funds |
| D. | he average cost of short term funds |
| Answer» D. he average cost of short term funds | |
| 8. |
Working capital management is managing ____________. |
| A. | hort term assets and liabilities |
| B. | ong term assets |
| C. | ong terms liabilities |
| D. | nly short term assets |
| Answer» B. ong term assets | |
| 9. |
The expansion of CAPM is ____________. |
| A. | apital amount pricing model. |
| B. | apital asset pricing model. |
| C. | apital asset printing model. |
| D. | apital amount printing model. |
| Answer» C. apital asset printing model. | |
| 10. |
Shares having no face value are known as |
| A. | o par stock |
| B. | t par stock |
| C. | qual stock |
| D. | ebt equity stock |
| Answer» B. t par stock | |
| 11. |
Investment bankers operate in the______________. |
| A. | rimary market |
| B. | econdary market |
| C. | and B both |
| D. | one of above |
| Answer» B. econdary market | |
| 12. |
The formula of EBIT = ________ |
| A. | ales - Variable cost |
| B. | ontribution - Fixed cost |
| C. | ales - Fixed cost |
| D. | ll the above |
| Answer» C. ales - Fixed cost | |
| 13. |
Which of the following is not an objective of financial management? |
| A. | aximization of wealth of shareholders |
| B. | aximization of profits |
| C. | obilization of funds at an acceptable cost |
| D. | nsuring discipline in the organization. |
| Answer» E. | |
| 14. |
A firm will have favourable leverage if its _____ are more than the debt cost |
| A. | ebt |
| B. | nterest |
| C. | quity |
| D. | arnings |
| Answer» E. | |
| 15. |
Net asset value takes into account____________. |
| A. | oth realized and unrealized capital gains |
| B. | nly realized capital gains |
| C. | nly unrealized capital gains |
| D. | either realized nor unrealized capital gains. |
| Answer» B. nly realized capital gains | |
| 16. |
The ___________ is a window through which the investor can see the company. |
| A. | yndicate offer |
| B. | PO |
| C. | rospectus |
| D. | helf rule. |
| Answer» D. helf rule. | |
| 17. |
Operating leverage = ______. |
| A. | ontribution / EBIT |
| B. | ontribution / EBT |
| C. | ontribution / total expenses |
| D. | ontribution / operating PBT |
| Answer» B. ontribution / EBT | |
| 18. |
Mutual funds may be affiliated with an underwriter. This means____________. |
| A. | he underwriter has an exclusive right to distribute shares |
| B. | he underwriter selects the securities in the portfolio |
| C. | here is no risk to the issuer of the mutual fund |
| D. | here is no risk to the investor of the mutual fund. |
| Answer» B. he underwriter selects the securities in the portfolio | |
| 19. |
If NAV > market price of a fund, then the fund ________ |
| A. | s selling at a discount |
| B. | s selling at a premium |
| C. | s an index fund |
| D. | s an exchange traded fund |
| Answer» B. s selling at a premium | |
| 20. |
A group of mutual funds with a common management are known as______________. |
| A. | und syndicates |
| B. | und conglomerates |
| C. | und families |
| D. | und complexes |
| Answer» D. und complexes | |
| 21. |
Which of the following generally traded on stock exchanges? |
| A. | nit investment trusts |
| B. | losed-end investment companies |
| C. | pen-end investment companies |
| D. | ll trade on stock exchanges |
| Answer» E. | |
| 22. |
The arbitrary process is the behavioral foundation for the ____________. |
| A. | M approach |
| B. | X approach |
| C. | order approach |
| D. | iller approach |
| Answer» B. X approach | |
| 23. |
Market value of the shares are decided by ____________. |
| A. | he respective companies |
| B. | he investment market |
| C. | he government |
| D. | hareholders |
| Answer» C. he government | |
| 24. |
In his traditional role the finance manager is responsible for ___________. |
| A. | roper utilisation of funds |
| B. | rrangement of financial resources |
| C. | cquiring capital assets of the organization |
| D. | fficient management of capital |
| Answer» C. cquiring capital assets of the organization | |
| 25. |
The primary goal of the financial management is ____________. |
| A. | o maximize the return |
| B. | o minimize the risk |
| C. | o maximize the wealth of owners |
| D. | o maximize profit |
| Answer» D. o maximize profit | |
| 26. |
An unmanaged fixed income security portfolio handled by an independent trustee is known as a______________. |
| A. | unk bond fund |
| B. | losed-end investment company |
| C. | nit investment trust |
| D. | edge fund |
| Answer» E. | |
| 27. |
Variable cost in an organization |
| A. | e fixed according to the rate of growth |
| B. | hanges with the volume of production |
| C. | oes not change with volume of production |
| D. | emains constant |
| Answer» C. oes not change with volume of production | |
| 28. |
The most popular type of Investment Company is a ________. |
| A. | nit investment trust |
| B. | utual fund |
| C. | losed-end investment company |
| D. | eal estate investment trust |
| Answer» C. losed-end investment company | |
| 29. |
The type of financial security in which firms do not borrow money rather lease their assets is classified as |
| A. | leases |
| B. | preferred stocks |
| C. | common stocks |
| D. | corporate stocks |
| Answer» B. preferred stocks | |
| 30. |
The process of selling company stock at large to the general public and get lending from banks is classified as an |
| A. | initial public offering |
| B. | external public offering |
| C. | internal public offering |
| D. | unprofessional offering |
| Answer» B. external public offering | |
| 31. |
The markets dealing the loans of autos, education, vacations and appliances are considered as |
| A. | consumer credit loans |
| B. | commercial markets |
| C. | residential markets |
| D. | mortgage markets |
| Answer» B. commercial markets | |
| 32. |
The financial markets include |
| A. | primary markets |
| B. | capital markets |
| C. | physical asset markets |
| D. | all of the above |
| Answer» E. | |
| 33. |
The risk in which the value of investment depends on what happens to foreign exchange rates is classified as |
| A. | preferred risk |
| B. | exchange rate risk |
| C. | country risk |
| D. | foreign risk |
| Answer» C. country risk | |
| 34. |
The price for the debt is called |
| A. | debt rate |
| B. | investment return |
| C. | discount rate |
| D. | interest rate |
| Answer» E. | |
| 35. |
In financial markets, the period of maturity within one to five years of financial instruments is classified as |
| A. | short-term |
| B. | long-term |
| C. | intermediate term |
| D. | capital term |
| Answer» D. capital term | |
| 36. |
The markets which bring closer the institutions needing funds and with the surplus funds are classified as |
| A. | financial markets |
| B. | corporate institutions |
| C. | hedge firms |
| D. | retirement planners |
| Answer» B. corporate institutions | |
| 37. |
An attitude of investor towards dealing with risk determines the |
| A. | rate of return |
| B. | rate of exchange |
| C. | rate of intrinsic stock |
| D. | rate of extrinsic stock |
| Answer» B. rate of exchange | |
| 38. |
The cost of money is affected by the factors which include |
| A. | production opportunities |
| B. | risk |
| C. | public offering |
| D. | inflation |
| Answer» E. | |
| 39. |
The financial security issued by the banks operating outside U.S is classified as |
| A. | dollar bonds |
| B. | euro deposits |
| C. | Eurodollar market deposits |
| D. | euro bonds |
| Answer» D. euro bonds | |
| 40. |
The firm which helps in indirect transfer such as Merrill Lynch is classified as |
| A. | investment banking house |
| B. | investment bank |
| C. | saving house |
| D. | saving bank |
| Answer» B. investment bank | |
| 41. |
The banks such as Bank of America serves a range of savers and borrowers are classified as |
| A. | transfer banks |
| B. | commercial banks |
| C. | serving banks |
| D. | nations banks |
| Answer» C. serving banks | |
| 42. |
The default free financial security sells by U.S treasury is classified as |
| A. | U.S treasury bills |
| B. | commercial paper |
| C. | certificate of deposit |
| D. | mutual funds |
| Answer» B. commercial paper | |
| 43. |
The set of rules consisting of behavior towards its directors, creditors, shareholders, competitors and community is considered as |
| A. | agency governance |
| B. | hiring governance |
| C. | corporate governance |
| D. | external governance |
| Answer» D. external governance | |
| 44. |
Earnings of business which is available for free distribution to all the stockholders and creditors is classified as |
| A. | free cash flows |
| B. | free distribution |
| C. | available income |
| D. | cash income |
| Answer» B. free distribution | |
| 45. |
The bonds issue by corporations which are more riskier than preferred stocks are classified as |
| A. | leases |
| B. | preferred stocks |
| C. | common stocks |
| D. | corporate stocks |
| Answer» D. corporate stocks | |
| 46. |
An unlimited liability is classified as liabilities of the |
| A. | limited partners |
| B. | general partners |
| C. | venture partners |
| D. | corporate partners |
| Answer» C. venture partners | |
| 47. |
The 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 | |
| 48. |
The firm's promise to pay and is backed or guaranteed by bank is classified as |
| A. | customer's acceptance |
| B. | banker's acceptance |
| C. | federal acceptance |
| D. | treasury acceptance |
| Answer» C. federal acceptance | |
| 49. |
The sales revenue $90,000, operating taxes $30,000 and operating capital $15,000 then value of free cash flows (in USD) will be |
| A. | 45000 |
| B. | 13500 |
| C. | 65000 |
| D. | 75000 |
| Answer» B. 13500 | |
| 50. |
In financial markets, the period of maturity less than one year of financial instruments is classified as |
| A. | short-term |
| B. | long-term |
| C. | intermediate term |
| D. | capital term |
| Answer» B. long-term | |