finance MCQs – Page 19

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 Review each marked answer and report any item that may be outdated or unclear.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
361. Redemption option which protects investors against rise in interest rate is considered as________?
comments icon0

A. Redeemable at finding

B. Redeemable at refund

C. Redeemable at deferred

D. Redeemable at par
362. Collection of net income, amortization and depreciation is divided by common shares outstanding to calculate______________?
comments icon0
A. Cash flow per share

B. Cash flow of financing activities

C. Cash flow of investment

D. Cash flow of operations

363. An increase in marginal cost of capital and the capital rationing are two arising complications of __________?
comments icon0

A. greater capital budget

B. minimum capital budget

C. optimal capital budget

D. maximum capital budget

364. The first step in calculation of net present value is to find out ________?
comments icon0

A. future value of equity

B. present value of equity

C. present value cash flow

D. future value of cash flow

365. The present value of future cash flows is divided by an initial cost of the project to calculate __________?
comments icon0

A. negative index

B. project index

C. exchange index

D. profitability index
366. Standard deviation is 18% and coefficient of variation is 1.5% an expected rate of return will be_____________?
comments icon0

A. none of above

B. 19.50%

C. 27%

D. 12%
367. Movement of price or rise or fall of prices of options is classified as_________?
comments icon0
A. Binomial lattice

B. Pricing movement

C. Price change

D. Option lattice

368. In capital asset pricing model, assumptions must be followed including________?
comments icon0

A. No transaction costs

B. No taxes

C. Fixed quantities of assets

D. All of above
369. Type of risk in which beta is equal to one is classified as____________?
comments icon0

A. Multiple risk stock

B. Varied risk stock

C. Total risk stock

D. Average risk stock
370. The sum of discounted cash flows is best defined as ___________?
comments icon0

A. defined future value

B. technical equity

C. project net present value

D. equity net present value

371. Cost of capital is equal to required return rate on equity in case if investors are only__________?
comments icon0

A. Valuation manager

B. Common stockholders

C. Equity dealer

D. Asset seller

372. Professionals such as doctors, accountants and lawyers often make corporations are classified as____________?
comments icon0

A. General professionals

B. Professional corporation

C. Professional association

D. Both B and C
373. In a statement of cash flows, a company investing in short-term financial investments and in fixed assets results in______________?
comments icon0
A. Decreased cash

B. Increased equity

C. Increased cash

D. Increased liabilities

374. Type of financial securities that matures in less than a year are classified as_______________?
comments icon0

A. Discounted intermediaries

B. Money market securities

C. Capital market securities

D. Saving intermediaries

375. An internal rate of return in capital budgeting can be modified to make it the representative of __________?
comments icon0

A. relative inflow

B. relative cost

C. relative outflow

D. relative profitability

376. Land, buildings, and factory fixed equipment are classified as____________?
comments icon0

A. Financial liability

B. Financial asset

C. Tangible asset

D. Non-tangible assets

377. In internal rate of returns, the discount rate which forces the net present values to become zero is classified as ___________?
comments icon0

A. negative rate of return

B. positive rate of return

C. external rate of return

D. internal rate of return
378. An option that gives investors right to sell a stock at predefined price is classified as____________?
comments icon0
A. Put option

B. Out of money options

C. Money back options

D. Call option

379. The present value of future cash flows is $2000 and an initial cost is $1100 then the profitability index will be ___________?
comments icon0

A. 0.55

B. 0.0182

C. 0.55

D. 1.82
380. The profit margin = 4.5%, assets turnover = 2.2 times, equity multiplier = 2.7 times then return on assets will be __________?
comments icon0

A. 0.094

B. 0.2673

C. 0.4 times

D. 26.73 times