finance MCQs – Page 16

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 Review each marked answer and report any item that may be outdated or unclear.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
301. Type of relationship exists between an expected return and risk of portfolio is classified as___________?
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A. Non-linear

B. Fixed and aggregate

C. Linear

D. Non-fixed and non-aggregate

302. In capital budgeting, a negative net present value results in _________?
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A. zero economic value added

B. percent economic value added

C. positive economic value added

D. negative economic value added
303. The project whose cash flows are sufficient to repay the capital invested for rate of return then the net present value will be ____________?
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A. independent

B. positive

C. negative

D. zero
304. Mostly in financials, risk of portfolio is smaller than that of assets________?
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A. Negative correlation

B. Mean

C. Weighted average

D. Mean correlation

305. A theory which states that assets are traded at price equal to its intrinsic value is classified as___________________?
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A. Efficient market hypothesis

B. Inefficient money hypothesis

C. Efficient money hypothesis

D. Inefficient market hypothesis

306. If the net present value is positive then the profitability index will be ___________?
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A. greater than two

B. less than one

C. greater than one

D. equal to

307. An inflation free rate of return and inflation premium is two components of_________?
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A. Steeper rate

B. Quoted rate

C. Unquoted rate

D. Portfolio rate

308. In large expansion programs, the increased riskiness and the floatation cost associated with project can cause ___________?
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A. rise in transaction cost of capital

B. fall in marginal cost of capital

C. rise in marginal cost of capital

D. rise in transaction cost of capital

309. In capital budgeting, the number of non-normal cash flows having internal rate of returns are _________?
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A. multiple

B. accepted

C. non-accepted

D. one

310. Markets dealing with residential loans, industry real estate loans, agricultural loans and commercial loans are called___________?
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A. Mortgage markets

B. Commercial markets

C. Agriculture markets

D. Residential markets

311. Sum of market risk and diversifiable risk are classified as total risk which is equivalent to_______________?
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A. Standard alphas

B. Variance

C. Alphas variance

D. Sharpes alpha

312. If the profit margin is equal to 4.5% and the total assets turnover is 1.8% then the return on assets DuPont equation would be _________?
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A. 0.025

B. 0.004

C. 4 times

D. 0.081
313. In financial markets, period of maturity more than five years of financial instruments is classified as___________________?
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A. Short-term

B. Intermediate term

C. Capital term

D. Long-term
314. The payback period in which an expected cash flows are discounted with the help of project cost of capital is classified as __________?
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A. discounted project cost

B. discounted cash flows

C. discounted rate of return

D. discounted payback period
315. The word Bank is derived from which of the following?
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A. Bancus

B. Banque

C. Bench

D. All of the above

316. A type of beta which incorporates about company such as changes in capital structure is classified as___________?
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A. Industry Beta

B. Fundamental Beta

C. Subtracted Beta

D. Market Beta

317. Financial markets include___________?
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A. Capital markets

B. Physical asset markets

C. Primary markets

D. All of above
318. An analysis of decision making of investors and managers is classified as_________?
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A. Riskier finance

B. Behavioral finance

C. Premium finance

D. Buying finance

319. In capital budgeting, the term of bond which has great sensitivity to interest rates is __________?
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A. external term bonds

B. internal term bonds

C. long-term bonds

D. short-term bonds

320. The net present value, profitability index, payback and discounted payback are the methods to __________?
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A. evaluate projects

B. evaluate equity

C. evaluate budgeting

D. evaluate cash flow