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Q.1
Financial markets include
primary markets
capital markets
physical asset markets
all of above
Q.2
Members and employees of credit unions are loaned for
mortgages
home improvement loans
auto purchases
all of above
Q.3
Ability to trade at net price very quickly is classified as
original trading
liquidity
offline trading
fixed price trading
Q.4
Loans by finance companies, banks and credit unions is classified as
consumer credit loans
dollar bonds
Eurodollar market deposits
euro bonds
Q.5
Bonds issue by corporations which are more risky than preferred stocks are classified as
leases
preferred stocks
common stocks
corporate stocks
Q.6
Funds which are used as an interest-bearing checking accounts are classified as
money market funds
capital market funds
money mutual funds
insurance money funds
Q.7
Physical location exchange or telephone networks are types of
long-term markets
secondary markets
money markets
capital markets
Q.8
Bonds which are more risky than corporate bonds and are issued by major corporations are classified as
common stocks
corporate stocks
leases
preferred stocks
Q.9
In financial markets, period of maturity within one to five years of financial instruments is classified as
short-term
long-term
intermediate term
capital term
Q.10
Federal Reserve policy and federal surplus or deficit of budget affect the
cost of production
cost of money
opportunity cost
inflation risk
Q.11
Market where market makers keep record of stock of financial instruments is classified as
stock market
dealer market
outcry auction system
face to face communication
Q.12
An unlimited liability for business debts and less capital for growth are limitations of
proprietorship
personal business
Private Corporation
personal ownership
Q.13
Method of matching orders by posting orders of buying and selling is classified as
electronic communication network
electronic dealer network
electronic stock network
electronic order network
Q.14
An earning of business which is available for free distribution to all stockholders and creditors is classified as
free cash flows
free distribution
available income
cash income
Q.15
Collection of money from investors and spending money in other investment activities is classified as
future funds
hedge funds
retirement funds
pension funds
Q.16
Markets for products such as wheat, rice, cotton, real estate and autos dealing is classified as
physical asset markets
intangible assets
competitive markets
easy markets
Q.17
Price of stock that companies observe in financial markets is called
market price
intrinsic price
extrinsic price
fundamental price
Q.18
Business owned by a single person in unincorporated way is called
proprietorship
personal business
Private Corporation
personal ownership
Q.19
According to the traditional approach cost of capital affected by?
debt-equity mix
debt-capital mix
equity expenses mix
debt-interest mix
Q.20
For which of the following factors are the debentures more attractive to the investors?
The principal is redeemable at maturity
A debenture-holder enjoys prior claim on the assets of the company over its shareholders in the event of liquidation
trustee is appointed to preserve the interest of the debenture holders
All the above.
Q.21
If NAV > market price of a fund, then the fund ________
is selling at a discount
is selling at a premium
is an index fund
is an exchange traded fund
Q.22
The objective of financial management is to ______________.
generate the maximum net profit
generate the maximum retained earnings
generate the maximum wealth for its shareholders
generate maximum funds for the firm at the least cost.
Q.23
Financial leverage is also known as.
Trading on equity
Trading on debt
Interest on equity
Interest on debt
Q.24
Bonus share are not permitted unless the ____________ shares, if any, are made fully-paid.
partly paid
semi paid
fully paid
unpaid
Q.25
The formula of EBIT = ________
Sales - Variable cost
Contribution - Fixed cost
Sales - Fixed cost
All the above
Q.26
Investment bankers operate in the______________.
primary market
secondary market
A and B both
None of above
Q.27
Mutual funds may be affiliated with an underwriter. This means____________.
the underwriter has an exclusive right to distribute shares
the underwriter selects the securities in the portfolio
there is no risk to the issuer of the mutual fund
there is no risk to the investor of the mutual fund.
Q.28
Operating leverage = ______.
contribution / EBIT
contribution / EBT
contribution / total expenses
contribution / operating PBT
Q.29
Net asset value takes into account____________.
both realized and unrealized capital gains
only realized capital gains
only unrealized capital gains
neither realized nor unrealized capital gains.
Q.30
A firm will have favourable leverage if its _____ are more than the debt cost
debt
interest
equity
earnings
Q.31
Which of the following is not an objective of financial management?
Maximization of wealth of shareholders
Maximization of profits
Mobilization of funds at an acceptable cost
Ensuring discipline in the organization.
Q.32
Variable cost per unit.
varies with the level of output
remains constant irrespective of the level of output
changes with the growth of the firm
does not change with volume of production
Q.33
Marketable securities are primarily________.
short-term debt instruments
short-term equity securities
long-term debt instruments
long-term equity securities
Q.34
The arbitrary process is the behavioral foundation for the ____________.
MM approach
XX approach
Gorder approach
Miller approach
Q.35
Fixed cost per unit _______.
does not change with volume of production
be flexible according to the rate of interest
changes according to volume of production
not remains constant
Q.36
Re-order level is ____________than safety level.
higher
lower
medium
fixed
Q.37
The most popular type of Investment Company is a ________.
unit investment trust
mutual fund
closed-end investment company
real estate investment trust
Q.38
The coupon rate is another name for the__________.
market interest rate
current yield
stated interest rate
yield to maturity
Q.39
Dividends are paid________________.
monthly
quarterly
semi-annually
yearly
Q.40
Long term fund sources are ___________.
Retained earnings
Debentures
Share capital
All of the above
Q.41
Shares having no face value are known as
no par stock
at par stock
equal stock
debt equity stock
Q.42
The ___________ is a window through which the investor can see the company.
Syndicate offer
IPO
Prospectus
Shelf rule.
Q.43
Which of the following generally traded on stock exchanges?
Unit investment trusts
Closed-end investment companies
Open-end investment companies
All trade on stock exchanges
Q.44
A group of mutual funds with a common management are known as______________.
fund syndicates
fund conglomerates
fund families
fund complexes
Q.45
Variable cost in an organization
be fixed according to the rate of growth
changes with the volume of production
does not change with volume of production
remains constant
Q.46
An unmanaged fixed income security portfolio handled by an independent trustee is known as a______________.
junk bond fund
closed-end investment company
unit investment trust
hedge fund
Q.47
If an investor states that Intel is overvalued at 65 times, he is referring to___________.
earnings per share
dividend yield
book value
P/E ratio
Q.48
When a company uses increased fixed cost for production, this is an example of what type of leverage.
operating leverage
financial leverage
variable cost leverage
combined leverage
Q.49
Operating incomes and the discount rate of a particular risk class are the 2 factors determining ____________.
Dependence hypothesis
Traditional view
Modern view
Independence hypothesis
Q.50
The largest single institutional owner of common stocks is________.
mutual funds
insurance companies
pension funds
commercial banks
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