finance MCQs – Page 25

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 Review each marked answer and report any item that may be outdated or unclear.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

481. An annuity with an extended life is classified as_____________?
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A. Due perpetuity

B. Extended life

C. Perpetuity

D. Deferred perpetuity

482. An increase in value of option leads to low present value of exercise cost only if it has____________?
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A. High volatility

B. Low volatility

C. Interest rates are high

D. Interest rates are low

483. Markets which deals with high liquid and short-term debt securities are classified as_____________?
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A. Capital markets

B. Money markets

C. Short-term markets

D. Liquid markets

484. Greater value of option, larger span of time value is usually results in__________?
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A. Longer put option

B. Longer call option

C. Shorter put option

D. Shorter call option

485. A point where the profile of net present value crosses the horizontal axis at the plotted graph indicates the project ___________?
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A. internal rate of return

B. costs

C. external rate of return

D. cash flows

486. In calculation of time, value of money, N represents___________?
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A. Number of premium received

B. Number of payment periods

C. Number of investment

D. Number of installments

487. The techniques which are used to identify financial statements trends include __________?
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A. common size analysis

B. percent change analysis

C. returning ratios analysis

D. Both A and B

488. The formula such as, net income available for common stockholders divided by total assets is used to calculate __________?
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A. return on total equity

B. return on sales

C. return on debt

D. return on total assets

489. In an individual stock, relevant risk is classified as___________?
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A. Stand-alone coefficient

B. Relevant coefficient

C. Beta coefficient

D. Alpha coefficient

490. A modified internal rate of return is considered as present value of costs and is equal to ________?
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A. p.v of terminal value

B. fv of hurdle rate

C. fv of terminal value

D. p.v of hurdle rate

491. A company who issues bonds or stocks in result raised funds which finally____________?
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A. Increases liabilities

B. Increases equity

C. Increases cash

D. Decreases cash

492. If current price increases from lower to higher then an____________?
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A. Option value will decrease

B. Option value equal to zero

C. Option value equal to one

D. Option value will increase

493. Standard deviation is divided by expected rate of return is used to calculate_________?
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A. Coefficient of standard

B. Coefficient of return

C. Coefficient of deviation

D. Coefficient of variation

494. Funds which are used as interest-bearing checking accounts are classified as____________?
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A. Capital market funds

B. Insurance money funds

C. Money market funds

D. Money mutual funds

495. Prices of bonds will be decreased if an interest rates_________?
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A. Declines

B. Equals

C. Rises

D. None of above

496. Markets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as_____________?
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A. Physical asset markets

B. Financial asset markets

C. Easy markets

D. Financial instruments

497. In situation of bankruptcy, stock which is recorded above common stock and below debt account is_____________?
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A. Common liabilities

B. Preferred stock

C. Debt liabilities

D. Hybrid stock

498. A tighter probability distribution shows the___________?
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A. Higher risk

B. Peaked risk

C. Expected risk

D. Lower risk

499. Mutual fund allows investors to sale out their share during any normal trading hours is classified as____________?
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A. Capital trade fund

B. Management expense

C. Exchange traded fund

D. Money trade fund

500. Net income is $2250 and non cash charges are $1150 then net cash flow would be _________?
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A. $3,500

B. $3,400

C. $2,200

D. $1,100

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