finance MCQs – Page 15

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 Review each marked answer and report any item that may be outdated or unclear.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
281. The price per share is $25 and the cash flow per share is $6 then the price to cash flow ratio would be ___________?
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A. 0.24

B. 4.16 times

C. 0.0416

D. 0.24 times

282. The net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be ___________?
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A. 0.12 times

B. 0.114

C. 0.12

D. 0.00114

283. Cost which has occurred already and not affected by decisions is classified as______________?
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A. Mean cost

B. Occurred cost

C. Weighted cost

D. Sunk cost
284. Risk which is caused by events such as strikes, unsuccessful marketing programs and other lawsuits is classified as____________?
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A. Stock risk

B. >Diversifiable risk

C. Portfolio risk

D. Market risk

285. Relationship between risk and required return is classified as___________?
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A. Riskier return line

B. Market risk line

C. Required return line

D. Security market line
286. If payment of security is paid as $100 at end of year for three years, it is an example of______________?
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A. Fixed payment investment

B. Lump sum amount

C. Annuity

D. Fixed interval investment

287. The initial cost is $5000 and the probability index is 3.2 then the present value of cash flows is _________?
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A. 1562.5

B. 8200

C. 0.0064

D. 16000
288. If book value is greater than market value comparison with investors for future stock are considered as_______________?
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A. Experienced

B. Pessimistic

C. Optimistic

D. Inexperienced

289. The ratios which relate firms stock to its book value per share, cash flow and earnings are classified as _________?
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A. marginal ratios

B. return ratios

C. equity ratios

D. market value ratios
290. In capital budgeting, two projects having cost of capital as 12% is classified as __________?
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A. return rate

B. budgeting rate

C. capital rate

D. hurdle rate

291. Stocks which has high book for market ratio are considered as_____________?
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A. Optimistic

B. Less risky

C. Pessimistic

D. More risky
292. Standard deviation is 18% and expected return is 15.5% then coefficient of variation would be__________?
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A. 2.50%

B. 0.86%

C. 2.50%

D. 1.16%
293. The present value of future cash flows is $4150 and an initial cost is $1300 then the profitability index will be ____________?
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A. 0.0319

B. 5450

C. 0.31 times

D. 3.19

294. Difference between actual return on stock and predicted return is considered as___________?
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A. Prediction error

B. Actual error

C. Probability error

D. Random error
295. A project which have one series of cash inflows and results in one or more cash outflows is classified as __________
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A. abnormal cash flow

B. normal costs

C. normal cash flows

D. abnormal costs

296. Other factors held constant, but the lesser project liquidity is because of __________?
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A. shorter payback period

B. less project return

C. greater payback period

D. greater project return

297. Future beta is needed to calculate in most situations is classified as____________?
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A. Standard betas

B. Adjusted betas

C. Varied betas

D. Historical betas
298. An uncovered cost at the start of the year is $300, full cash flow during recovery year is $650 and prior years to full recovery is 4 then payback would be _________?
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A. 4.46 years

B. 2.46 years

C. 5.46 years

D. 3.46 years

299. Coefficient of variation is used to identify an effect of__________?
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A. Risk

B. Return

C. Deviation

D. Both A and B
300. Return on assets = 6.7% and equity multiplier = 2.5% then return on equity will be ______________?
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A. 0.37%

B. 16.75%

C. 2.68%

D. 9.20%