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.
| 1951. |
_A loan that is repaid on monthly, quarterly and annual basis in equal payments is classified as$? |
| A. | amortized loan |
| B. | depreciated loan |
| C. | appreciated loan |
| D. | repaid payments |
| Answer» B. depreciated loan | |
| 1952. |
_A schedule which shows interest constitutes reduced principal and unpaid balance is considered as$? |
| A. | repaid schedule |
| B. | depreciated schedule |
| C. | amortization schedule |
| D. | appreciated schedule |
| Answer» D. appreciated schedule | |
| 1953. |
_An inventory recording in balance sheet includes$? |
| A. | First in first out |
| B. | Last in first out |
| C. | last in last out |
| D. | Both A and B |
| Answer» E. | |
| 1954. |
_In situation of bankruptcy, stock which is recorded above common stock and below debt account is$? |
| A. | debt liabilities |
| B. | preferred stock |
| C. | hybrid stock |
| D. | common liabilities |
| Answer» C. hybrid stock | |
| 1955. |
_Future value of interest if it is calculated once a year is classified as$? |
| A. | One time compounding |
| B. | annual compounding |
| C. | semi-annual compounding |
| D. | monthly compounding |
| Answer» C. semi-annual compounding | |
| 1956. |
_Net investment in operating capital is Rs 7000 and net operating profit after taxes is Rs 11,000 then free cash flow will be$? |
| A. | -Rs 18,000.00 |
| B. | Rs 18,000.00 |
| C. | -Rs 4,000.00 |
| D. | Rs 4,000.00 |
| Answer» E. | |
| 1957. |
_Net operating profit after taxes is Rs 4500, net investment in operating capital is Rs 8500 and then free cash flow would be$? |
| A. | -Rs 4,000.00 |
| B. | Rs 4,000.00 |
| C. | -Rs 18,000.00 |
| D. | Rs 18,000.00 |
| Answer» B. Rs 4,000.00 | |
| 1958. |
_Real rate expected cash flows and nominal rate expected cash flows must be$? |
| A. | accelerated |
| B. | equal |
| C. | different |
| D. | inflated |
| Answer» C. different | |
| 1959. |
_An analysis and estimation of cash flows include$? |
| A. | input data and key output |
| B. | depreciation schedule |
| C. | net salvage values |
| D. | all of above |
| Answer» E. | |
| 1960. |
_Mutual funds may be affiliated with an underwriter. This means____________.$? |
| A. | the underwriter has an exclusive right to distribute shares |
| B. | the underwriter selects the securities in the portfolio |
| C. | there is no risk to the issuer of the mutual fund |
| D. | there is no risk to the investor of the mutual fund. |
| Answer» B. the underwriter selects the securities in the portfolio | |
| 1961. |
_Net asset value takes into account____________.$? |
| A. | both realized and unrealized capital gains |
| B. | only realized capital gains |
| C. | only unrealized capital gains |
| D. | neither realized nor unrealized capital gains. |
| Answer» B. only realized capital gains | |
| 1962. |
_The arbitrary process is the behavioral foundation for the ____________.$? |
| A. | MM approach |
| B. | XX approach |
| C. | Gorder approach |
| D. | Miller approach |
| Answer» B. XX approach | |
| 1963. |
_The most popular type of Investment Company is a ________.$? |
| A. | unit investment trust |
| B. | mutual fund |
| C. | closed-end investment company |
| D. | real estate investment trust |
| Answer» C. closed-end investment company | |
| 1964. |
_The formula of EBIT = ________$? |
| A. | Sales - Variable cost |
| B. | Contribution - Fixed cost |
| C. | Sales - Fixed cost |
| D. | All the above |
| Answer» C. Sales - Fixed cost | |
| 1965. |
_The expansion of CAPM is ____________.$? |
| A. | Capital amount pricing model. |
| B. | Capital asset pricing model. |
| C. | Capital asset printing model. |
| D. | Capital amount printing model. |
| Answer» C. Capital asset printing model. | |
| 1966. |
_Financial leverage measures ____________.$? |
| A. | sensitivity of EBIT with respect of % change with respect to output |
| B. | % variation in the level of production |
| C. | sensitivity of EPS with respect to % change in level of EBIT |
| D. | no change with EBIT and EPS |
| Answer» D. no change with EBIT and EPS | |
| 1967. |
_Present value of future cash flows is Rs 4150 and an initial cost is Rs 1300 then profitability index will be$? |
| A. | 3.00% |
| B. | Rs 3.19 |
| C. | 0.31 times |
| D. | Rs 5,450.00 |
| Answer» B. Rs 3.19 | |
| 1968. |
_Cash flows that could be generated from an owned asset by company but not use in project are classified as$? |
| A. | occurred cost |
| B. | mean cost |
| C. | opportunity costs |
| D. | weighted cost |
| Answer» D. weighted cost | |
| 1969. |
_Financial leverage helps one to estimate ____________.$? |
| A. | business risk |
| B. | financial risk |
| C. | both risks |
| D. | production risk |
| Answer» C. both risks | |
| 1970. |
_Free cash flow is Rs 12000, an operating cash flow is Rs 4000, an investment outlay cash flow is Rs 5000 then salvage cash flow would be$? |
| A. | -Rs 21,000.00 |
| B. | Rs 21,000.00 |
| C. | -Rs 3,000.00 |
| D. | Rs 3,000.00 |
| Answer» E. | |
| 1971. |
_Which of the following would be considered a risk-free investment?$? |
| A. | Gold |
| B. | Equity in a house |
| C. | High-grade corporate bonds |
| D. | Treasury bills |
| Answer» E. | |
| 1972. |
_In cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is$? |
| A. | no inflation |
| B. | high inflation |
| C. | no transactions |
| D. | no acceleration |
| Answer» B. high inflation | |
| 1973. |
_EBIT is usually the same thing as.$? |
| A. | funds provided by operations |
| B. | earnings before taxes |
| C. | net income |
| D. | operating profit |
| Answer» E. | |
| 1974. |
_The cost of capital of a long term debt is generally.$? |
| A. | Lower than the owned funds |
| B. | Equal to that of owned funds |
| C. | More or less than owned funds |
| D. | Higher than that of owned funds |
| Answer» E. | |
| 1975. |
_Long term fund sources are ___________.$? |
| A. | Retained earnings |
| B. | Debentures |
| C. | Share capital |
| D. | All of the above |
| Answer» E. | |
| 1976. |
_Which of the following is not a characteristic of investments companies?$? |
| A. | pooled investing |
| B. | diversification |
| C. | managed portfolios |
| D. | reduced expenses |
| Answer» E. | |
| 1977. |
_Bonds issued by corporations and exposed to default risk are classified as$? |
| A. | corporation bonds |
| B. | default bonds |
| C. | risk bonds |
| D. | zero risk bonds |
| Answer» B. default bonds | |
| 1978. |
_Bond which is offered below its face value is classified as$? |
| A. | present value bond |
| B. | original issue discount bond |
| C. | coupon issued bond |
| D. | discounted bond |
| Answer» C. coupon issued bond | |
| 1979. |
_Profit margin = 4.5%, assets turnover = 2.2 times, equity multiplier = 2.7 times then return on equity will be$? |
| A. | 26.73% |
| B. | 25.73% |
| C. | 9.40% |
| D. | 9.00% |
| Answer» B. 25.73% | |
| 1980. |
_The measure of business risk is __________.$? |
| A. | operating leverage |
| B. | financial leverage |
| C. | total leverage |
| D. | working capital leverage |
| Answer» B. financial leverage | |
| 1981. |
_Prices of bonds will be decreased if an interest rates$? |
| A. | rises |
| B. | declines |
| C. | equals |
| D. | none of above |
| Answer» B. declines | |
| 1982. |
_A fixed rate of _________ is payable on debentures$? |
| A. | dividend |
| B. | Commission |
| C. | Interest |
| D. | Brokerage |
| Answer» D. Brokerage | |
| 1983. |
_____________dividend promises to pay shareholders at future date$? |
| A. | Scrip |
| B. | Cash |
| C. | Stock |
| D. | Property |
| Answer» B. Cash | |
| 1984. |
_An unsecured bond that provides no lien against property as security for bond obligation is classified as$? |
| A. | secured bond |
| B. | debenture |
| C. | obligation bond |
| D. | specific bond |
| Answer» C. obligation bond | |
| 1985. |
_* In expected rate of return for constant growth, capital gains is divided by capital gains yield to calculate$? |
| A. | returning price |
| B. | ending price |
| C. | beginning price |
| D. | regular price |
| Answer» D. regular price | |
| 1986. |
_Risk on a stock portfolio which can be reduced by placing it in diversified portfolio is classified as$? |
| A. | stock risk |
| B. | portfolio risk |
| C. | diversifiable risk |
| D. | market risk |
| Answer» D. market risk | |
| 1987. |
_Future beta is needed to calculate in most situations is classified as$? |
| A. | historical betas |
| B. | adjusted betas |
| C. | standard betas |
| D. | varied betas |
| Answer» B. adjusted betas | |
| 1988. |
_According to Black Scholes model, purchaser can borrow fraction of security at risk free interest rate which is$? |
| A. | short term |
| B. | long term |
| C. | transaction cost |
| D. | no transaction cost |
| Answer» B. long term | |
| 1989. |
_Risk in which value of investment depends on what happens to foreign exchange rates is classified as$? |
| A. | preferred risk |
| B. | exchange rate risk |
| C. | country risk |
| D. | foreign risk |
| Answer» C. country risk | |
| 1990. |
_The primary goal of the financial management is ____________.$? |
| A. | to maximize the return |
| B. | to minimize the risk |
| C. | to maximize the wealth of owners |
| D. | to maximize profit |
| Answer» E. | |
| 1991. |
_An annual interest payment divided by current price of bond is considered as$? |
| A. | current yield |
| B. | maturity yield |
| C. | return yield |
| D. | earning yield |
| Answer» B. maturity yield | |
| 1992. |
_Coupon rate of convertible bond is$? |
| A. | higher |
| B. | lower |
| C. | variable |
| D. | stable |
| Answer» C. variable | |
| 1993. |
_Bonds that do not pay original coupon payment but payment is made from additional bonds are classified as$? |
| A. | payment in-kind bonds |
| B. | payment off-kind bonds |
| C. | kind payment |
| D. | additional bond |
| Answer» B. payment off-kind bonds | |
| 1994. |
_Bond yield is 12% and bond risk premium is 4.5% then cost of common stock would be$? |
| A. | 37.50% |
| B. | 7.50% |
| C. | 15.50% |
| D. | 2.67% |
| Answer» D. 2.67% | |
| 1995. |
_In capital budgeting, a technique which is based upon discounted cash flow is classified as$? |
| A. | net present value method |
| B. | net future value method |
| C. | net capital budgeting method |
| D. | net equity budgeting method |
| Answer» B. net future value method | |
| 1996. |
_Markowitz's main contribution to portfolio theory is___________.$? |
| A. | that risk is the same for each type of financial asset |
| B. | that risk is a function of credit, liquidity and market factors |
| C. | risk is not quantifiable |
| D. | insight about the relative importance of variances and co variances in determining portfolio risk |
| Answer» E. | |
| 1997. |
_Net present value is a popular method which falls$? |
| A. | With in non- discount cash flow method |
| B. | With in discount cash flow method |
| C. | Equal With in non- discount cash flow method |
| D. | No discount cash flow |
| Answer» C. Equal With in non- discount cash flow method | |
| 1998. |
_The rate of return on investment ____ with the shortage of working capital.$? |
| A. | falls |
| B. | going |
| C. | constant |
| D. | change |
| Answer» B. going | |
| 1999. |
_Which of the following is true regarding the expected return of a portfolio?$? |
| A. | It is a weighted average only for stock portfolios |
| B. | It can only be positive |
| C. | It can never be above the highest individual return |
| D. | All of the above are true |
| Answer» D. All of the above are true | |
| 2000. |
_The decision function of financial management can be broken down into the__________ decisions.$? |
| A. | financing and investment |
| B. | investment, financing, and asset management |
| C. | financing and dividend |
| D. | capital budgeting, cash management, and credit management |
| Answer» C. financing and dividend | |