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. |
Stockholders having right to elect directors and in smaller firms have high post are classified as |
| A. | ublic stocks |
| B. | nactive stocks |
| C. | pecial stockholders |
| D. | ommon stockholders |
| Answer» E. | |
| 2. |
Owners of corporation having certain rights and privileges are considered as |
| A. | pecial stockholders |
| B. | ommon stockholders |
| C. | ublic stocks |
| D. | nactive stocks |
| Answer» C. ublic stocks | |
| 3. |
In expected rate of return for constant growth, an expected total rate of return must be |
| A. | ess than expected yield on dividend |
| B. | reater than expected yield on dividend |
| C. | qual to expected yield on dividend |
| D. | qual to one |
| Answer» D. qual to one | |
| 4. |
An expected final stock price is Rs 45 and an original investment is Rs 25 then an expected capital gain will be |
| A. | s 75.00 |
| B. | Rs 75.00 |
| C. | Rs 20.00 |
| D. | s 20.00 |
| Answer» E. | |
| 5. |
Paid dividend with dividend yield 25% is Rs 5 then cost price would be |
| A. | 0.00% |
| B. | s 30.00 |
| C. | 0.00% |
| D. | s 20.00 |
| Answer» E. | |
| 6. |
Dividend yield is 25% and current price is Rs 40 then dividend yield will be |
| A. | s 50.00 |
| B. | s 10.00 |
| C. | s 65.00 |
| D. | s 15.00 |
| Answer» C. s 65.00 | |
| 7. |
In expected rate of return for constant growth, expected total rate of return is equal to |
| A. | uying pricing |
| B. | ividend yield |
| C. | ate of return |
| D. | elling pricing |
| Answer» C. ate of return | |
| 8. |
Third step in calculating value of stock with non-constant growth rate is to find |
| A. | V of expected dividends |
| B. | V of expected dividends |
| C. | V of intrinsic rate |
| D. | V of intrinsic rate |
| Answer» B. V of expected dividends | |
| 9. |
If an expected final stock price is Rs 85 and an original investment is Rs 70 then value of expected capital gain would be |
| A. | s 15.00 |
| B. | Rs 15.00 |
| C. | s 155.00 |
| D. | Rs 155.00 |
| Answer» B. Rs 15.00 | |
| 10. |
An amount of company retain earning, return on equity and inflation are factors which effect |
| A. | arning growth |
| B. | eturn on assets |
| C. | eturn on sales |
| D. | eturn on value |
| Answer» B. eturn on assets | |
| 11. |
Value of stock is Rs 400 and required rate of return is 20% then preferred dividend would be |
| A. | s 80.00 |
| B. | s 8,000.00 |
| C. | s 20.00 |
| D. | s 50.00 |
| Answer» B. s 8,000.00 | |
| 12. |
Preferred dividend is divided for required rate of return to calculate |
| A. | alue of number of shares |
| B. | alue of equity |
| C. | alue of preferred stock |
| D. | alue of common stock |
| Answer» D. alue of common stock | |
| 13. |
A formula such as an original investment plus an expected capital gain is used to calculate |
| A. | inal stock |
| B. | xpected stock |
| C. | xpected final stock price |
| D. | inal stock price |
| Answer» D. inal stock price | |
| 14. |
Capital gain is Rs 2 and beginning price is Rs 24 then capital gains yield will be |
| A. | 2.00% |
| B. | 4.00% |
| C. | 4.00% |
| D. | 2.00% |
| Answer» E. | |
| 15. |
In expected rate of return for constant growth, an expected yield on capital must be |
| A. | qual to zero |
| B. | reater than expected growth rate |
| C. | ess than expected growth rate |
| D. | qual to expected growth rate |
| Answer» E. | |
| 16. |
In market analysis, market multiple is multiplied by firm earning before interest, taxes, depreciation and amortization to calculate |
| A. | arket total value |
| B. | irm total value |
| C. | ndustry value |
| D. | axes value |
| Answer» C. ndustry value | |
| 17. |
A right which controls and prevents transfer from current stockholders to other new stockholders is considered as |
| A. | orporate charter |
| B. | elling charter |
| C. | aws |
| D. | urchase chart |
| Answer» B. elling charter | |
| 18. |
An expected dividend yield is 5.5% and expected rate of return is 11.5% then constant growth rate would be |
| A. | .09% |
| B. | 6.00% |
| C. | 7.50% |
| D. | .00% |
| Answer» E. | |
| 19. |
A stock which is issued to meet specific needs of company is considered as |
| A. | lassified stock |
| B. | pecific stock |
| C. | eeded stock |
| D. | eeting stock |
| Answer» B. pecific stock | |
| 20. |
A situation in which an outside group solicit proxies to take control of business is classified as |
| A. | utside group |
| B. | olicit process |
| C. | roxy fight |
| D. | ontrolled management |
| Answer» D. ontrolled management | |
| 21. |
Value of stock is Rs 900 and required rate of return is 30% then preferred dividend will be |
| A. | s 270.00 |
| B. | s 27,000.00 |
| C. | s 90.00 |
| D. | s 90.00 |
| Answer» B. s 27,000.00 | |
| 22. |
An expected dividend yield is 7.5% and an expected rate of return is 15.5% then constant growth rate will be |
| A. | 2.00% |
| B. | .00% |
| C. | 3.00% |
| D. | .06% |
| Answer» C. 3.00% | |
| 23. |
Calculation of formula in common stock valuation does not include |
| A. | ntrinsic value |
| B. | ividend of stockholder |
| C. | umber of stock issued |
| D. | xpected growth rate |
| Answer» D. xpected growth rate | |
| 24. |
First step in calculating value of stock with non-constant growth rate is to |
| A. | stimate expected dividend |
| B. | ctual expected dividend |
| C. | stimate number of share |
| D. | stimate intrinsic shares |
| Answer» B. ctual expected dividend | |
| 25. |
An earning before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as |
| A. | ntity multiple |
| B. | epreciation multiple |
| C. | arning multiple |
| D. | mortization multiple |
| Answer» B. epreciation multiple | |
| 26. |
Preferred dividend is Rs 60 and required rate of return is 20% then value of preferred stock will be |
| A. | s 40.00 |
| B. | s 120.00 |
| C. | s 12.00 |
| D. | s 300.00 |
| Answer» E. | |
| 27. |
Expected capital gain is Rs 20 and expected final price is Rs 50 then original investment will be |
| A. | s 30.00 |
| B. | Rs 30.00 |
| C. | s 70.00 |
| D. | Rs 70.00 |
| Answer» B. Rs 30.00 | |
| 28. |
An expected final stock price is Rs 70 and an expected capital gain is Rs 25 then an original investment would be |
| A. | s 45.00 |
| B. | Rs 45.00 |
| C. | s 95.00 |
| D. | Rs 95.00 |
| Answer» D. Rs 95.00 | |
| 29. |
Growth rate which is predicted by marginal investors for dividends is classified as |
| A. | xpected growth rate |
| B. | nnual growth rate |
| C. | ast growth rate |
| D. | nexpected growth rate |
| Answer» B. nnual growth rate | |
| 30. |
Capital gain is Rs 3 and capital gains yield is 6% then beginning price will be |
| A. | s 18.00 |
| B. | s 36.00 |
| C. | s 50.00 |
| D. | s 55.00 |
| Answer» D. s 55.00 | |
| 31. |
Preferred stocks are also classified as |
| A. | ntrinsic preference |
| B. | erpetuities |
| C. | xtrinsic preference |
| D. | eak preference |
| Answer» C. xtrinsic preference | |
| 32. |
Real rate of return, risk and expected inflation are primary determinants of |
| A. | inimum rate of return |
| B. | ccepted return |
| C. | xpected return |
| D. | eal risk free rate |
| Answer» B. ccepted return | |
| 33. |
Constant growth rate is 8% and an expected dividend yield is 5.4% then expected rate of return would be |
| A. | 3.40% |
| B. | .40% |
| C. | 3.40% |
| D. | 13.40% |
| Answer» D. 13.40% | |
| 34. |
An efficient market hypothesis states all public information which is reflected in current market prices is classified as |
| A. | eak form efficiency |
| B. | trong form efficiency |
| C. | arket efficiency |
| D. | emi strong efficiency |
| Answer» E. | |
| 35. |
Stock which has fixed payments and failure of payments which do not lead to bankruptcy is classified as |
| A. | ommon stock |
| B. | referred stock |
| C. | onds equity |
| D. | ommon shares |
| Answer» C. onds equity | |
| 36. |
In expected rate of return for constant growth, capital gains is divided by capital gains yield to calculate |
| A. | eturning price |
| B. | nding price |
| C. | eginning price |
| D. | egular price |
| Answer» D. egular price | |
| 37. |
Range of probability distribution with 68.26% lies within |
| A. | + 3σ and -3σ) |
| B. | + 4σ and -4σ) |
| C. | + 1σ and -1σ) |
| D. | + 2σ and -2σ) |
| Answer» D. + 2σ and -2σ) | |
| 38. |
Market risk premium is 8% and risk free return is 7% then market required return would be |
| A. | 5.00% |
| B. | .00% |
| C. | .60% |
| D. | .14% |
| Answer» B. .00% | |
| 39. |
Market risk and diversifiable risk are two components of |
| A. | tock's risk |
| B. | ortfolio risk |
| C. | xpected return |
| D. | tock return |
| Answer» B. ortfolio risk | |
| 40. |
Type of premium asked by investors for bearing risk on average stock is classified as |
| A. | verage premium |
| B. | arket risk premium |
| C. | tock premium |
| D. | uying discount |
| Answer» C. tock premium | |
| 41. |
In an individual stock, relevant risk is classified as |
| A. | lpha coefficient |
| B. | eta coefficient |
| C. | tand-alone coefficient |
| D. | elevant coefficient |
| Answer» C. tand-alone coefficient | |
| 42. |
When changes in patents and industry competition occur, required rate of return |
| A. | hanges |
| B. | oes not change |
| C. | ecomes zero |
| D. | ecomes one |
| Answer» C. ecomes zero | |
| 43. |
Treasury yielded by bond is 7% and market required return is 13% then market risk premium will be |
| A. | .16% |
| B. | 0.00% |
| C. | .00% |
| D. | .53% |
| Answer» D. .53% | |
| 44. |
If risk can be eliminated with help of diversification, then relevant risk is |
| A. | maller than stand-alone risk |
| B. | arger than stand-alone risk |
| C. | maller than diverse risk |
| D. | arger than diverse risk |
| Answer» B. arger than stand-alone risk | |
| 45. |
Mostly in financials, risk of portfolio is smaller than that of assets |
| A. | ean |
| B. | eighted average |
| C. | ean correlation |
| D. | egative correlation |
| Answer» C. ean correlation | |
| 46. |
Market required return is subtracted from risk free rate which is used to calculate |
| A. | uoted risk premium |
| B. | arket risk premium |
| C. | ortfolio risk premium |
| D. | nquoted risk premium |
| Answer» C. ortfolio risk premium | |
| 47. |
Required return is 15% and premium for risk is 11% then risk free return would be |
| A. | 6.00% |
| B. | .00% |
| C. | 6.50% |
| D. | .36% |
| Answer» C. 6.50% | |
| 48. |
Risk in average individual stock can be reduced by placing an individual stock in |
| A. | ow risk portfolio |
| B. | iversified portfolio |
| C. | ndiversified portfolio |
| D. | igh risk portfolio |
| Answer» C. ndiversified portfolio | |
| 49. |
Relationship between risk and required return is classified as |
| A. | ecurity market line |
| B. | equired return line |
| C. | arket risk line |
| D. | isky return line |
| Answer» B. equired return line | |
| 50. |
A model in which behavior of asset returns is measured for set of risk factors and market risk is classified as |
| A. | actorization model |
| B. | wo factor model |
| C. | ultifactor model |
| D. | uoted factor model |
| Answer» D. uoted factor model | |