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finance MCQs

Practise multiple-choice questions from finance for competitive examinations and subject revision. Review each marked answer and report any item that may be outdated or unclear.

finance Mcqs
1. Annual cash dividends divided by annual earnings; or alternatively, dividends per share divided by earning per share is termed as:
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A. Expected dividend ratio

B. Dividend payout ratio

C. Proposed dividend ratio

D. Earning per share ratio

2. Profit maximization is the maximizing a firms Earning:
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A. Before Tax

B. After Tax

C. Both A and B

D. None of Them

3. All the constituencies with a stake in the fortunes of the company are termed as:
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A. Stakeholders

B. Directors

C. Chief executives

D. Subordinates

4. Having some overall goal in mind, financial management is concerned with:
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A. Financing of assets

B. Management of assets

C. All of them

D. Acquisition of assets

5. ___________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.
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A. Financial management

B. Profit maximization

C. Social responsibility

D. Agency theory

6. The system by which companies are managed and controlled is known as:
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A. Strategic System

B. Management System

C. Internal System

D. Corporate Governance
7. Stakeholders include:
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A. Creditors and customs

B. Stakeholders

C. All of Them

D. Employees and suppliers

8. Corporate governance encompasses the relationship among a companys:
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A. Shareholders, board of directors and senior management

B. Board of directors and senior management

C. Shareholders and senior management

D. Shareholders and board of director

9. The Board of Directors sets company-wide policy and advices the CEO and other senior executies, who manage the companys:
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A. Year-to-Year activities

B. Managerial activities

C. Day-to-Day activities

D. Financial activities

10. The investment decision is the most important of the firms three major decisions, when it comes to:
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A. Value proposition

B. Value creation

C. Value deletion

D. Value addition

11. An individual authorized by another person, called the principle, to act on the latters on behalf is known as an/a:
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A. Agent

B. Servant

C. Subordinate

D. Assistant

12. Markets dealing loans of autos, education, vacations and appliances are considered as__________?
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A. Consumer credit loans

B. Residential markets

C. Commercial markets

D. Mortgage markets

13. Financial security with low degree risk and investment held by businesses is classified as________________?
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A. Money market mutual funds

B. Commercial paper

C. Treasury bills

D. Negotiable certificate of deposit

14. Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n):
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A. None of the given options

B. Operating activity

C. Investing activity

D. Financing activity

15. The Yield to Maturity of a bond is the same as_____________?
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A. The future value of the bond

B. The bonds internal rate of return

C. The present value of the bond

D. None of these

16. Risk free rate is subtracted from expected market return is considered as___________?
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A. Equity risk premium

B. Diversifiable risk

C. Market risk premium

D. Country risk

17. As free bonds issue for welfare by industrial agencies or pollution control agencies are classified as__________?
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A. Agent bonds

B. Development bonds

C. Pollution control bonds

D. Both B and C
18. Cash flow from assets involves which of the following component(s)?
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A. Change in net working capital

B. Operating cash flow

C. All of the given options

D. Capital spending

19. Sum of discounted cash flows is best defined as____________?
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A. Equity net present value

B. Defined future value

C. Technical equity

D. Project net present value
20. In internal rate of returns, discount rate which forces net present values to become zero is classified as__________?
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A. Internal rate of return

B. Positive rate of return

C. Negative rate of return

D. External rate of return