finance Mcqs
102. If market interest rate falls below coupon rate then bond will be sold__________?
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A. Equal to return rate

B. Above its par value

C. Below its par value

D. Seasoned price

103. Present value of future cash flows is divided by an initial cost of project to calculate_______?
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A. Project index

B. Profitability index

C. Exchange index

D. Negative index

105. The Capital Asset Pricing Model calculate expected:
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A. None of the above

B. Risk and Return

C. Risk

D. Return

106. Other factors held constant, greater project liquidity is because of___________?
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A. Less project returns

B. Greater payback period

C. Shorter payback period

D. Greater project return

108. Number of years forecasted to recover an original investment is classified as________?
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A. Payback period

B. Original period

C. Investment period

D. Forecasted period

109. If a company revaluates its fixed assets, the current ratio of the company will:
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A. Remain unaffected

B. Undergo change only if liabilities are remaining constant

C. Improve if assets are revalued downwards

D. Improve if assets are revalued upward

110. If market interest rate rises above coupon rate, then bond will be sold_____________?
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A. Above its par value

B. Seasoned price

C. Equal to return rate

D. Below its par value
111. Which of the following ratios are intended to address the firms financial leverage?
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A. Long-term Solvency Ratios

B. Liquidity Ratios

C. Profitability Ratios

D. Asset Management Ratios

113. In cash flow estimation, depreciation is considered as________________?
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A. Cash charge

B. Non cash charge

C. Net salvage discount

D. Cash flow discounts

114. Earning per share is computed as:
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A. No of common shares outstanding
B. ____________Earning AfterTax_____________
116. Right held with corporations to call issued bonds for redemption is considered as___________?
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A. Original provision

B. Redeem provision

C. Artificial provision

D. Call provision
117. Legal entity separation from its legal owners and managers with help of state laws is classified as____________?
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A. Corporation

B. Limited corporate business

C. Unlimited corporate business

D. Controlled corporate business

120. Variability for expected returns for projects is classified as___________?
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A. Variable risk

B. Returning risk

C. Stand-alone risk

D. Expected risk

121. Price for debt is called_________?
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A. Interest rate

B. Discount rate

C. Debt rate

D. Investment return

122. Bonds issued by corporations and exposed to default risk are classified as_________?
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A. Zero risk bonds

B. Corporation bonds

C. Risk bonds

D. Default bonds

123. In weighted average cost of capital, rising in interest rate leads to_________________?
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A. Decrease in cost of debt

B. Increase capital structure

C. Increase in cost of debt

D. Decrease capital structure

124. The conflict of interest between stockholders and management is known as:
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A. Interest conflict

B. Management conflict

C. Agency cost

D. Agency problem
125. Bonds with deferred call have protection which is classified as__________?
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A. Provision protection

B. Deferred protection

C. Provision protection

D. Call protection
127. A standardized financial statement presenting all items of the statement as a percentage of total is:
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A. a balance sheet

B. an income statemen

C. a cash flow statement

D. a common-size statement
128. Rate of return which is required to satisfy stockholders and debt holders is classified as__________?
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A. Weighted average cost of interest

B. Mean cost of capital

C. Weighted average cost of capital

D. Weighted average salvage value

131. In large expansion programs, increased riskiness and flotation 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 transaction cost of capital

D. Rise in marginal cost of capital
132. Treasury bonds are exposed to additional risks that are included________?
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A. Reinvestment risk

B. Interest rate risk

C. Investment risk

D. Both A and B
133. High price to earning ratio shows companys_____________?
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A. High growth prospect

B. High risk prospect

C. High marginal rate

D. Low dividends paid

134. When price of bond is calculated below its par value, it is classified as___________?
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A. Consideration earning

B. classified bond

C. Compound bond

D. Discount bond
135. In case of international business which of the given factor(s) must be considered?
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A. Attitude of Governments

B. All of the given options

C. Role of foreign exchange

D. Balance of payments

136. Real interest rate and real cash flows do not include_____________?
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A. Equity effects

B. Opportunity effects

C. Debt effects

D. Inflation effects
137. Cash inflows are revenues of project and are represented by__________?
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A. Hurdle number

B. Relative number

C. Positive numbers

D. Negative numbers

139. Set of projects or set of investments usually maximize firm value is classified as_________?
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A. Minimum capital budget

B. Greater capital budget

C. Optimal capital budget

D. Maximum capital budget

140. An equation in which total assets are multiplied to profit margin is classified as_____________?
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A. Turnover equation

B. Du DuPont equation

C. Common equation

D. Preference equation

141. Coupon payment is calculated with help of interest rate, then this rate considers as________?
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A. Yearly interest rate

B. Payment interest

C. Par interest

D. Coupon interest
142. Bonds that can be converted into shares of common stock are classified as_________?
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A. Stock bonds

B. Shared bonds

C. Common bonds

D. Convertible bonds
143. Bonds issued to individuals by corporations are classified as__________?
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A. U.S treasury bonds

B. Corporate bonds

C. Municipal bonds

D. Mortgages

144. Coupon rate of convertible bond is_________?
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A. Lower

B. Higher

C. Variable

D. Stable

145. Which of the following is measured by retention ratio?
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A. Operating efficiency

B. Dividend policy

C. Financial policy

D. Asset use efficiency

147. Interest rates, tax rates and market risk premium are factors which an/a_____________?
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A. Industry cannot control

B. Firm must control

C. Industry cannot control

D. Firm cannot control
148. Cash flows occurring with more than one change in sign of cash flow are classified as________?
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A. Non-normal cash flow

B. Non-normal costs

C. Normal costs

D. Normal cash flow

149. Which of the following strategy belongs to restrictive policy regarding size of investments in current assets?
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A. To less short-term debt and more long-term debt

B. To maintain a low ratio of current assets to sales

C. To maintain a high ratio of current assets to sales

D. To more short-term debt and less long-term debt

150. Payment divided by par value is classified as______________?
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A. Divisible payment

B. Par payment

C. Per period payment

D. Coupon payment