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. |
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 | |
| 2. |
Second mortgages pledged against bonds security are referred as |
| A. | Loan mortgages |
| B. | Medium mortgages |
| C. | Senior mortgages |
| D. | Junior mortgages |
| Answer» B. Medium mortgages | |
| 3. |
Securities future value is $1,000,000 and present value of securities is $500,000 with an interest rate of 4.5%, N will be |
| A. | 16.7473 years |
| B. | 0.0304 months |
| C. | 15.7473 years |
| D. | 0.7575 years |
| Answer» B. 0.0304 months | |
| 4. |
Return on assets is equal 6.7% and equity multiplier is equal to 2.5% then return on equity will be |
| A. | 0.1675 |
| B. | 0.0268 |
| C. | 0.00373 |
| D. | 0.092 |
| Answer» B. 0.0268 | |
| 5. |
Profit margin = 4.5%, assets turnover = 2.2 times, equity multiplier = 2.7 times then return on assets will be |
| A. | 0.2673 |
| B. | 26.73 times |
| C. | 0.094 |
| D. | 0.4 times |
| Answer» B. 26.73 times | |
| 6. |
Rate charged by bank 12.5% on credit loans and 3% semiannually on installment loans is considered as |
| A. | Periodic rate |
| B. | Perpetuity rate of return |
| C. | Annual rate |
| D. | Annuity rate of return |
| Answer» B. Perpetuity rate of return | |
| 7. |
Required rate of return in calculating bonds cash flow is also classified as |
| A. | Going rate of return |
| B. | Yield |
| C. | Earnings rate |
| D. | Both A and B |
| Answer» B. Yield | |
| 8. |
Return on assets = 5.5%, Total assets $3,000 and common equity is $1,050 then return on equity would be |
| A. | 22275 |
| B. | 0.1571 |
| C. | 0.01925 |
| D. | 1.925 times |
| Answer» C. 0.01925 | |
| 9. |
Rate of return (in percentages) consists of |
| A. | Capital gain yield interest yield |
| B. | Return yield + stable yield |
| C. | Return yield + instable yield |
| D. | Par value + market value |
| Answer» B. Return yield + stable yield | |
| 10. |
Price earnings ratio and price by cash flow ratio are classified as |
| A. | Marginal ratios |
| B. | Equity ratios |
| C. | Return ratios |
| D. | Market value ratios |
| Answer» B. Equity ratios | |
| 11. |
Price per ratio is divided by cash flow per share ratio, 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» B. Sales to growth ratio | |
| 12. |
Paid dividend is $20 and current price is $50 then dividend yield will be |
| A. | 0.4 |
| B. | 40 |
| C. | 70 |
| D. | 30 |
| Answer» B. 40 | |
| 13. |
Paid dividend is $20 and dividend yield is 40% then current price would be |
| A. | 0.6 |
| B. | 60 |
| C. | 50 |
| D. | 0.02 |
| Answer» D. 0.02 | |
| 14. |
Paid dividends to common stockholders $67,600,000 and common shares outstanding = 55,000,000 then dividend per share will be |
| A. | 1.229 |
| B. | 0.813 |
| C. | 2.12 |
| D. | 2.78 |
| Answer» B. 0.813 | |
| 15. |
Paid dividend with dividend yield 25% is $5 then cost price would be |
| A. | 0.3 |
| B. | 30 |
| C. | 0.2 |
| D. | 20 |
| Answer» E. | |
| 16. |
Net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be |
| A. | 0.0007 |
| B. | 0.0714 |
| C. | 0.05 times |
| D. | 7.15 times |
| Answer» C. 0.05 times | |
| 17. |
Net operating profit after taxes is $4500, net investment in operating capital is $8500 and then free cash flow would be |
| A. | ?$4000 |
| B. | 4000 |
| C. | ?$18000 |
| D. | 18000 |
| Answer» B. 4000 | |
| 18. |
New York Stock Exchange is an example of |
| A. | Capital markets |
| B. | Money markets |
| C. | Liquid markets |
| D. | Short-term markets |
| Answer» B. Money markets | |
| 19. |
Noncash revenues are $500,000 and net income is $950,000 then net cash flow would be |
| A. | 475000 |
| B. | 485000 |
| C. | 1450000 |
| D. | 450000 |
| Answer» E. | |
| 20. |
Outstanding bonds are also classified as |
| A. | Standing bonds |
| B. | Outdated bonds |
| C. | Dated bonds |
| D. | Seasoned bonds |
| Answer» B. Outdated bonds | |
| 21. |
Preemptive right of common stockholders are necessarily included in companys |
| A. | Laws |
| B. | Purchase chart |
| C. | Corporate charter |
| D. | Selling charter |
| Answer» B. Purchase chart | |
| 22. |
Preferred dividend is $50 and required rate of return is 2.5% then value of preferred stock would be |
| A. | 0.2 |
| B. | 125 |
| C. | 2000 |
| D. | 52.5 |
| Answer» D. 52.5 | |
| 23. |
Preferred dividend is $60 and required rate of return is 20% then value of preferred stock will be |
| A. | 40 |
| B. | 120 |
| C. | 12 |
| D. | 300 |
| Answer» B. 120 | |
| 24. |
Initial cost is $5000 and probability index is 3.2 then present value of cash flows is |
| A. | 8200 |
| B. | 16000 |
| C. | 0.0064 |
| D. | 1562.5 |
| Answer» C. 0.0064 | |
| 25. |
Low price for earnings ratio is result of |
| A. | Low riskier firms |
| B. | High riskier firms |
| C. | Low dividends paid |
| D. | High marginal rate |
| Answer» B. High riskier firms | |
| 26. |
In cash flow estimation, depreciation shelters companys income from |
| A. | Expansion |
| B. | Salvages |
| C. | Taxation |
| D. | Discounts |
| Answer» B. Salvages | |
| 27. |
In corporation characteristics, an easy transferring and division of stock of shares is classified as |
| A. | Ownership interest transferability |
| B. | Deceased transferability |
| C. | Shared division |
| D. | Deceased division |
| Answer» B. Deceased transferability | |
| 28. |
In calculation of time, value of money, N represents |
| A. | Number of payment periods |
| B. | Number of investment |
| C. | Number of installments |
| D. | Number of premium received |
| Answer» B. Number of investment | |
| 29. |
In calculation of time value of money, PMT represents |
| A. | Present money tracking |
| B. | Payment |
| C. | Payment money tracking |
| D. | Future money payment |
| Answer» B. Payment | |
| 30. |
In capital budgeting, number of non-normal cash flows having internal rate of returns are |
| A. | One |
| B. | Multiple |
| C. | Accepted |
| D. | Non-accepted |
| Answer» B. Multiple | |
| 31. |
In capital budgeting, two projects having cost of capital as 12% is classified as |
| A. | Hurdle rate |
| B. | Capital rate |
| C. | Return rate |
| D. | Budgeting rate |
| Answer» B. Capital rate | |
| 32. |
In cash flow analysis, two projects are compared by using common life, is classified as |
| A. | Transaction approach |
| B. | Replacement chain approach |
| C. | Common life approach |
| D. | Both B and C |
| Answer» B. Replacement chain approach | |
| 33. |
If coupon rate is more than going rate of interest then bond will be sold |
| A. | More than its par value |
| B. | Seasoned par value |
| C. | At par value |
| D. | Below its par value |
| Answer» B. Seasoned par value | |
| 34. |
If deposited money $10,000 in bank pays interest 10% annually, an amount after five years will be |
| A. | 16105.1 dollars |
| B. | 0.01610 dollar per day |
| C. | 16105.1 dollars per year |
| D. | 16105.1 dollars per quarter |
| Answer» B. 0.01610 dollar per day | |
| 35. |
If payment of security is paid as $100 at end of year for three years, it is an example of |
| A. | Fixed payment investment |
| B. | Lump sum amount |
| C. | Fixed interval investment |
| D. | Annuity |
| Answer» B. Lump sum amount | |
| 36. |
If profit margin is equal to 4.5% and total assets turnover is 1.8% then return on assets DuPont equation would be |
| A. | 0.025 |
| B. | 0.081 |
| C. | 0.004 |
| D. | 4 times |
| Answer» C. 0.004 | |
| 37. |
If security pays $5,000 in 20 years with 7% annual interest rate, PV of security by using formula is |
| A. | 1292.10 dollars per year |
| B. | 1292.10 dollars |
| C. | 0.00077 dollars per year |
| D. | 16105.1 dollars per year |
| Answer» B. 1292.10 dollars | |
| 38. |
If stock has a great risk related to it then a required return is |
| A. | Higher |
| B. | Lower |
| C. | Zero |
| D. | All of the above |
| Answer» B. Lower | |
| 39. |
If stock market price is higher than strike price, then call option |
| A. | Price will be lower |
| B. | Rate will be higher |
| C. | Price will be higher |
| D. | Rate will be lower |
| Answer» B. Rate will be higher | |
| 40. |
In an option pricing, a rises in risk free rate results in options value |
| A. | Slight time decreases |
| B. | Slight increases |
| C. | Slight decreases |
| D. | Slight time increases |
| Answer» B. Slight increases | |
| 41. |
Gross fixed asset expenditures is $6000 and free cash flow is $8000 then operating cash flows will be |
| A. | ?$14000 |
| B. | 2000 |
| C. | 14000 |
| D. | ?$2000 |
| Answer» C. 14000 | |
| 42. |
High price to earnings ratio shows companies |
| A. | Low dividends paid |
| B. | High risk prospect |
| C. | High growth prospect |
| D. | High marginal rate |
| Answer» B. High risk prospect | |
| 43. |
If an expected final stock price is $85 and an original investment is $70 then value of expected capital gain would be |
| A. | 15 |
| B. | ?$15 |
| C. | 155 |
| D. | ?$155 |
| Answer» B. ?$15 | |
| 44. |
Free cash flow is $15000 and net investment in operating capital is $9000 then net operating profit after taxes will be |
| A. | 24000 |
| B. | 6000 |
| C. | ?$6000 |
| D. | ?$24000 |
| Answer» B. 6000 | |
| 45. |
Free cash flow is $15000, operating cash flow is $3000, investment outlay cash flow is $5000 then salvage cash flow will be |
| A. | 17000 |
| B. | ?$17000 |
| C. | 7000 |
| D. | ?$7000 |
| Answer» D. ?$7000 | |
| 46. |
Free cash flow is $17000 and net investment in operating capital is $10000 then net operating profit after taxes would be |
| A. | 7000 |
| B. | 27000 |
| C. | ?$27000 |
| D. | ?$7000 |
| Answer» C. ?$27000 | |
| 47. |
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 | |
| 48. |
Earnings before interest, taxes, depreciation and amortization are calculated by |
| A. | Subtracting operating cost from net sales |
| B. | Subtracting net sales from operating costs |
| C. | Adding operating cost and net sales |
| D. | Adding interest and taxes |
| Answer» B. Subtracting net sales from operating costs | |
| 49. |
Earnings before interest, taxes, depreciation and amortization average multiple for publicly traded companies is classified as |
| A. | Entity multiple |
| B. | Depreciation multiple |
| C. | Earnings multiple |
| D. | Amortization multiple |
| Answer» B. Depreciation multiple | |
| 50. |
Expected capital gain is $20 and expected final price is $50 then original investment will be |
| A. | 30 |
| B. | ?$30 |
| C. | 70 |
| D. | ?$70 |
| Answer» B. ?$30 | |