finance Mcqs
151. Financial policy is evaluated by which of the following?
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A. Total Assets Turnover

B. None of the given options

C. Debt-equity ratio

D. Profit Margin

152. If default probability is zero and bond is not called, then yield to maturity is_____________?
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A. Mature expected return rate

B. Equal to expected return rate

C. Higher than expected return rate

D. Lower than expected return rate

153. Type of bond in which payments are made on basis of inflation index is classified as_____________?
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A. Surplus bond

B. Purchasing power bond

C. Borrowed bond

D. Deficit bond

154. Set of rules made by corporation founders such as directors election procedure are classified as_________?
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A. Stock laws

B. Liability laws

C. By laws

D. Corporate laws

155. Standard Company had net sales of Rs. 750,000 over the past year. During that time, average receivables were Rs. 150,000. Assuming a 365-day year, what was the average collection period?
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A. 73 days

B. 5 days

C. 36 days

D. 48 days

156. If coupon rate is equal to going rate of interest, then bond will be sold________?
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A. Below its par value

B. At par value

C. More than its par value

D. Seasoned par value

157. An increasing in interest rate leads to decline in value of__________?
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A. Junk bonds

B. Standing bonds

C. Outstanding bonds

D. Premium bonds

158. If you plan to save Rs. 5,000 with a bank at an interest rate of 8%, what will be the worth of your amount after 4 years if interest is compounded annually?
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A. Rs. 5,900

B. Rs. 6,802

C. Rs. 6,600

D. Rs. 5,400

159. Which of the following is measured by profit margin?
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A. Financial policy

B. Dividend policy

C. Operating efficiency

D. Asset use efficiency

160. Bonds issued by government and backed by Pak government are classified as_________?
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A. Treasury bonds

B. Return security

C. Issued security

D. U.S bonds

161. A technique uses in comparative analysis of financial statement is____________?
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A. Common size analysis

B. Returning analysis

C. Preference analysis

D. Graphical analysis

162. If net present value is positive, then profitability index will be__________?
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A. Less than one

B. Equal to

C. Greater than one

D. Greater than two

163. Which of the following is not a quality of IRR ?
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A. Ideal to rank the mutually exclusive investments

B. Can be estimated even without knowing the discount rate

C. Most widely used

D. Easily communicated and understood

164. Bonds issued by local and state governments with default risk are____________?
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A. Municipal bonds

B. Zero bonds

C. Default bonds

D. Corporation bonds

165. Choose from the following a symptom which is not relating to Over Trading?
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A. Low current ratio

B. High inventory turnover ratiO

C. Cash shortage

D. Low inventory turnover ratio
166. Coupon payment of bond which is fixed at time of issuance____________?
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A. Becomes low

B. Becomes stable

C. Remains same

D. Becomes change

167. Price per share divided by earnings per share is formula for calculating_________?
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A. Earning price ratio

B. Earning ratio

C. Price earnings ratio

D. Pricing ratio

168. A price for equity is called______________?
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A. Debt rate

B. Cost of equity

C. Investment return

D. Interest rate

169. A firm reports total liabilities of Rs. 300,000 and owners equity of Rs. 500,000. What would be the total worth of the firms assets?
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A. Rs. 300,000

B. Rs. 800,000

C. Rs. 500,000

D. Rs. 1100,000

170. Full Form of BCCI ?
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A. Bank of Commerce and Cooperation International

B. Bank of Central Cooperation International

C. None of These

D. Bank of Credit and Commerce International
171. The principal amount of a bond at issue is called____________?
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A. Present value of a lump sum

B. Par value

C. Coupon value

D. Present value of an annuity

172. Finance is vital for which of the following business activity (activities)?
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A. Marketing Research

B. All of the given options

C. Design of marketing and distribution channels

D. Product Pricing

173. Which of the following refers to the cash flows that result from the firm?s day-to-day activities of producing and selling?
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A. Investing Cash Flows

B. Operating Cash Flows

C. All of the given options

D. Financing Cash Flows

174. Projects which are mutually exclusive but different on scale of production or time of completion then the___________?
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A. External return method

B. Net future value method

C. Net present value of method

D. Internal return method

175. In independent projects evaluation, results of internal rate of return and net present value lead to_____________?
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A. Cost decision

B. Different decisions

C. Same decisions

D. Cash flow decision

176. Which of the following terms refers to the use of debt financing?
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A. Manufacturing Leverage

B. Financial Leverage

C. None of the given options

D. Operating Leverage

177. Which of the following statement about bond ratings is TRUE?
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A. Bond ratings are typically paid for by a companys bondholders.

B. Bond ratings represent an independent assessment of the credit-worthiness of bonds.

C. Bond ratings are based solely on information acquired from sources other than the bond issuer.

D. None of the given options

178. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?
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A. 60%

B. 25%

C. 12%

D. 40%
179. An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax__________?
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A. Market premium

B. Cost of debt

C. Term structure

D. Risk premium

180. Maturity date decides at time of issuance of bond and legally permissible is classified as____________?
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A. Valued maturity

B. Original maturity

C. Artificial maturity

D. Permanent maturity

181. In financial markets, period of maturity less than one year of financial instruments is classified as________________?
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A. Short-term

B. Intermediate term

C. Long-term

182. Quick Ratio is also known as_______________?
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A. Cash Ratio

B. Solvency Ratio

C. Acid-test Ratio

D. Current Ratio

183. If coupon rate is less than going rate of interest, then bond will be sold________?
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A. Seasoned par value

B. Seasoned par value

C. At par value

D. More than its par value
184. The most important item that can be extracted from financial statements is the actual ________ of the firm.
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A. Net Present Value

B. Cash Flow

C. None of the given options

D. Net Working Capital

185. Which of the following set of ratios is used to assess a businesss ability to generate earnings as compared to its expenses and other relevant costs incurred during a specific period of time?
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A. Liquidity Ratios

B. Profitability Ratios

C. Market Value Ratios

D. Leverage Ratios

186. Which of the following is known as the group of assets such as stocks and bonds held by an investor ?
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A. None of the given options

B. Capital Structure

C. Portfolio

D. Stock Bundle

187. In mutually exclusive projects, project which is selected for comparison with others must have____________?
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A. All of above

B. Lower net present value

C. Zero net present value

D. Higher net present value
188. Which of the following refers to the difference between the sale price and cost of inventory?
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A. Markdown

B. Net worth

C. Net loss

D. Markup
189. Which of the following ratios are particularly interesting to short-term creditors?
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A. Profitability Ratios

B. Long-term Solvency Ratios

C. Market Value Ratios

D. Liquidity Ratios
190. If a firm uses cash to purchase inventory, its quick ratio will?
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A. Remain unaffected

B. Become zero

C. Increase

D. Decrease
191. A markets which deals with long-term corporate stocks are classified as
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A. Liquid markets

B. Capital markets

C. Short-term markets

D. Money markets

192. An uncovered cost at start of year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be__________?
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A. 3.5 years

B. 4.5 years

C. 4 years

D. 5 years

193. Which of the following equation is known as Cash Flow (CF) identity?
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A. CF to Stockholders = CF to Creditors + CF from Assets

B. CF from Assets = CF to Creditors + CF to Stockholder

C. CF from Assets = CF to Creditors CF to Stockholder

D. CF from Assets = CF to Stockholders CF to Creditors

194. Document in a corporation which consists of amount of stock, name and addresses of directors is classified as_____________?
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A. Liability plan

B. Corporation paperwork

C. Charter

D. Stock planning

195. In capital budgeting, term of bond which has great sensitivity to interest rates is______________?
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A. Short-term bonds

B. Internal term bonds

C. Long-term bonds

D. External term bonds

196. Balance Sheet is based upon which of the following formula?
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A. Assets + Stockholders equity = Liabilities

B. Assets + Liabilities = Stockholders equity

C. Assets = Liabilities + Stockholders equity

D. Assets = Liabilities Stockholders equity

197. In capital budgeting, positive net present value results in_________________?
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A. Zero economic value added

B. Positive economic value added

C. Negative economic value added

D. Percent economic value added

198. Between the two identical bonds having different maturity periods, the price of the ______ bond will change less than that of ______ bond.
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A. lower-coupon; higher-coupon

B. short-term; long-term

C. None of the given options

D. long-term; short-term

199. Rate of return (in percentages) consists of___________?
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A. Return yield + stable yield

B. Capital gain yield interest yield

C. Return yield + unstable yield

D. Par value + market value

200. If coupon rate is more than going rate of interest, then bond will be sold________?
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A. More than its par value

B. At par value

C. Seasoned par value

D. Below its par value