MCQOPTIONS
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MCQOPTIONS
This section includes 2436 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 1751. |
_ An interest yield = 7.9% and capital gains yield = 2.5% then total rate of return is$? |
| A. | 10.00% |
| B. | 3.16% |
| C. | 0.31% |
| D. | 5.40% |
| Answer» B. 3.16% | |
| 1752. |
_ Type of bonds that pays no coupon payment but provides little appreciation are classified as$? |
| A. | depreciated bond |
| B. | interest bond |
| C. | zero coupon bond |
| D. | appreciation bond |
| Answer» D. appreciation bond | |
| 1753. |
_ Right held with corporations to call issued bonds for redemption is considered as$? |
| A. | artificial provision |
| B. | call provision |
| C. | redeem provision |
| D. | original provision |
| Answer» C. redeem provision | |
| 1754. |
_ Maturity date decides at time of issuance of bond and legally permissible is classified as$? |
| A. | original maturity |
| B. | permanent maturity |
| C. | artificial maturity |
| D. | valued maturity |
| Answer» B. permanent maturity | |
| 1755. |
_ Legal document in which rights of issuing corporation and bondholder's state is classified as$? |
| A. | legal rights classification |
| B. | indenture |
| C. | ownership statement |
| D. | guarantee statement |
| Answer» C. ownership statement | |
| 1756. |
_ Bond's promised rate of return is also considered as$? |
| A. | yield to earning |
| B. | yield to investors |
| C. | yield to maturity |
| D. | yield to return |
| Answer» D. yield to return | |
| 1757. |
_ Type of bonds that are issued by foreign governments or foreign corporations are classified as$? |
| A. | zero risk bonds |
| B. | zero bonds |
| C. | foreign bonds |
| D. | government bonds |
| Answer» D. government bonds | |
| 1758. |
_ An interest rate which is used in calculation of cash flows of bonds is called$? |
| A. | required rate of redemption |
| B. | required rate of earning |
| C. | required rate of return |
| D. | required option |
| Answer» D. required option | |
| 1759. |
_ Altering the leverage ratio does not influence the market value of the firm. This is the basic premise of _______.$? |
| A. | net income approach |
| B. | traditional approach |
| C. | modern approach |
| D. | net operating income approach |
| Answer» E. | |
| 1760. |
_ Total return is equal to________.$? |
| A. | capital gain and yield |
| B. | yield and interest |
| C. | capital gain |
| D. | yield |
| Answer» B. yield and interest | |
| 1761. |
_ Net working capital refers to.$? |
| A. | total assets minus fixed assets |
| B. | current assets minus current liabilities |
| C. | current assets minus inventories |
| D. | current assets. |
| Answer» C. current assets minus inventories | |
| 1762. |
_ All of the following influence capital budgeting cash flows EXCEPT.$? |
| A. | accelerated depreciation |
| B. | salvage value |
| C. | tax rate changes |
| D. | method of project financing used |
| Answer» E. | |
| 1763. |
_ In proper capital budgeting analysis we evaluate incremental$? |
| A. | accounting income |
| B. | cash flow |
| C. | earnings |
| D. | operating profit |
| Answer» C. earnings | |
| 1764. |
_ The rational expectations model of dividend policy says that ______________.$? |
| A. | Since the expectations of the investors are always rational, there will be no effect of dividend policy on the valuation of the firm |
| B. | If the investors have rational expectations, they will value a dividend paying firm higher than a non-dividend paying firm |
| C. | If the declared dividend is in line with expectations of the investors, there will be no effect on the valuation of the firm |
| D. | If the declared dividend is in accordance with the expectations, the change in the firms value will be minimal |
| Answer» E. | |
| 1765. |
_ Financial risk is most associated with_______________.$? |
| A. | the use of equity financing by corporations |
| B. | the use of debt financing by corporations |
| C. | Equity investments held by corporations |
| D. | Debt investments held by corporations. |
| Answer» C. Equity investments held by corporations | |
| 1766. |
_ The return relative solves the problem of______________.$? |
| A. | inflation |
| B. | negative returns |
| C. | interest rates |
| D. | tax differences |
| Answer» C. interest rates | |
| 1767. |
_ An interest rate is 5%, number of period are 3, and present value is Rs 100,and then future value will be$? |
| A. | 115.76 |
| B. | 105.00 |
| C. | 110.25 |
| D. | 113.56 |
| Answer» B. 105.00 | |
| 1768. |
_ Net income is Rs 2250 and noncash charges are Rs 1150 then net cash flow would be$? |
| A. | Rs 1,100.00 |
| B. | Rs 3,400.00 |
| C. | Rs 2,200.00 |
| D. | Rs 3,500.00 |
| Answer» B. Rs 3,400.00 | |
| 1769. |
_ Values recorded as determined in marketplace are considered as$? |
| A. | market values |
| B. | book values |
| C. | appreciated values |
| D. | depreciated values |
| Answer» B. book values | |
| 1770. |
_ If security pays Rs 5,000 in 20 years with 7% annual interest rate, PV of security by using formula is$? |
| A. | Rs 1,290.10 |
| B. | Rs 1,292.10 |
| C. | Rs 1,295.10 |
| D. | Rs 1,297.10 |
| Answer» C. Rs 1,295.10 | |
| 1771. |
_ An interest rate which is paid by money borrower and charged by lender is considered as$? |
| A. | annual rate |
| B. | periodic rate |
| C. | perpetuity rate of return |
| D. | annuity rate of return |
| Answer» C. perpetuity rate of return | |
| 1772. |
_ Free cash flow is Rs 17000 and net investment in operating capital is Rs 10000 then net operating profit after taxes would be$? |
| A. | Rs 7,000.00 |
| B. | Rs 27,000.00 |
| C. | -Rs 27,000.00 |
| D. | -Rs 7,000.00 |
| Answer» C. -Rs 27,000.00 | |
| 1773. |
_ Net investment in operating capital is subtracted from net operating profit after taxes to calculate$? |
| A. | relevant inflows |
| B. | free cash flow |
| C. | relevant outflows |
| D. | cash outlay |
| Answer» C. relevant outflows | |
| 1774. |
_ Double declining balance method and sum of years digits are included in$? |
| A. | yearly method |
| B. | single methods |
| C. | double methods |
| D. | accelerated methods |
| Answer» E. | |
| 1775. |
_ Second mortgages pledged against bond's security are referred as$? |
| A. | loan mortgages |
| B. | medium mortgages |
| C. | senior mortgages |
| D. | junior mortgages |
| Answer» E. | |
| 1776. |
_ Operating leverage = ______.$? |
| A. | contribution / EBIT |
| B. | contribution / EBT |
| C. | contribution / total expenses |
| D. | contribution / operating PBT |
| Answer» B. contribution / EBT | |
| 1777. |
_ A firm will have favourable leverage if its _____ are more than the debt cost$? |
| A. | debt |
| B. | interest |
| C. | equity |
| D. | earnings |
| Answer» E. | |
| 1778. |
_ Which of the following generally traded on stock exchanges?$? |
| A. | Unit investment trusts |
| B. | Closed-end investment companies |
| C. | Open-end investment companies |
| D. | All trade on stock exchanges |
| Answer» E. | |
| 1779. |
_ Variable cost in an organization$? |
| A. | be fixed according to the rate of growth |
| B. | changes with the volume of production |
| C. | does not change with volume of production |
| D. | remains constant |
| Answer» C. does not change with volume of production | |
| 1780. |
_ Investment bankers operate in the______________.$? |
| A. | primary market |
| B. | secondary market |
| C. | A and B both |
| D. | None of above |
| Answer» B. secondary market | |
| 1781. |
_ Working capital management is managing ____________.$? |
| A. | short term assets and liabilities |
| B. | long term assets |
| C. | long terms liabilities |
| D. | only short term assets |
| Answer» B. long term assets | |
| 1782. |
_ ___________ are financial assets.$? |
| A. | Bonds |
| B. | Machines |
| C. | Stocks |
| D. | A and C |
| Answer» E. | |
| 1783. |
_ Project whose cash flows are less than capital invested for required rate of return then net present value will be$? |
| A. | negative |
| B. | zero |
| C. | positive |
| D. | independent |
| Answer» B. zero | |
| 1784. |
_ In capital budgeting, cost of capital is used as discount rate and is based on pre-determines$? |
| A. | cost of inflation |
| B. | cost of debt and equity |
| C. | cost of opportunity |
| D. | cost of transaction |
| Answer» C. cost of opportunity | |
| 1785. |
_ Traditional approach confines finance function only to _________ funds$? |
| A. | raising |
| B. | mobilizing |
| C. | utilizing |
| D. | financing |
| Answer» B. mobilizing | |
| 1786. |
_ Cash flows that should be considered for decision in hand are classified as$? |
| A. | relevant cash flows |
| B. | irrelevant cash flows |
| C. | marginal cash flows |
| D. | transaction cash flows |
| Answer» B. irrelevant cash flows | |
| 1787. |
_ Cost of retained earnings is equal to _______.$? |
| A. | Cost of equity |
| B. | Cost of debt |
| C. | Cost of bank loan |
| D. | Cost of term loans |
| Answer» B. Cost of debt | |
| 1788. |
_ In cash flow estimation, depreciation shelters company's income from$? |
| A. | expansion |
| B. | salvages |
| C. | taxation |
| D. | discounts |
| Answer» D. discounts | |
| 1789. |
_ The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called ____________.$? |
| A. | working capital decision |
| B. | an investment decision |
| C. | a production decision |
| D. | a sales decision |
| Answer» C. a production decision | |
| 1790. |
_ Which of the following would not be considered as capital market security?$? |
| A. | A corporate bond |
| B. | A common stock |
| C. | A 6-month Treasury bill |
| D. | A mutual fund share |
| Answer» D. A mutual fund share | |
| 1791. |
_ If an investor states that Intel is overvalued at 65 times, he is referring to___________.$? |
| A. | earnings per share |
| B. | dividend yield |
| C. | book value |
| D. | P/E ratio |
| Answer» E. | |
| 1792. |
_ Short term sources are$? |
| A. | Bank credit |
| B. | Public deposit |
| C. | Commercial papers |
| D. | All of the above |
| Answer» D. All of the above | |
| 1793. |
_ Treasury bonds are exposed to additional risks that are included$? |
| A. | reinvestment risk |
| B. | interest rate risk |
| C. | investment risk |
| D. | Both A and B |
| Answer» E. | |
| 1794. |
_ Risk of fall in income due to fall in interest rates in future is classified as$? |
| A. | income risk |
| B. | investment risk |
| C. | reinvestment risk |
| D. | mature risk |
| Answer» D. mature risk | |
| 1795. |
_ Formula such as net income available for common stockholders divided by total assets is used to calculate$? |
| A. | return on total assets |
| B. | return on total equity |
| C. | return on debt |
| D. | return on sales |
| Answer» B. return on total equity | |
| 1796. |
_ __________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.$? |
| A. | Hedging |
| B. | Market timing |
| C. | Performance measurement |
| D. | Asset allocation |
| Answer» E. | |
| 1797. |
_ Right side of balance sheet states the$? |
| A. | appreciated earnings |
| B. | liabilities |
| C. | assets |
| D. | stocks earnings |
| Answer» D. stocks earnings | |
| 1798. |
_ According to traditional approach, the average cost of capital _______________.$? |
| A. | Remains constant up to a degree of leverage and rises sharply thereafter with every increase in leverage |
| B. | Rises constantly with increase in leverage |
| C. | Decrease up to certain point, remains unchanged for moderate increase in leverage and rises beyond a certain point |
| D. | Decrease at an increasing rate with increase in leverage |
| Answer» D. Decrease at an increasing rate with increase in leverage | |
| 1799. |
_ __________ is concerned with the maximization of a firm's stock price.$? |
| A. | Shareholder wealth maximization |
| B. | Profit maximization |
| C. | Stakeholder welfare maximization |
| D. | EPS maximization |
| Answer» B. Profit maximization | |
| 1800. |
_ Unsecured bonds which is designated for only notes payable or all other debts are classified as$? |
| A. | designated bonds |
| B. | payable bonds |
| C. | ordinate bonds |
| D. | subordinated bonds |
| Answer» E. | |