finance MCQs – Page 5

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 Review each marked answer and report any item that may be outdated or unclear.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
81. Profitability index in capital budgeting is used for_________?
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A. Negative projects

B. Earned projects

C. Evaluate projects

D. Relative projects

82. Real risk-free interest rate in addition with an inflation premium is equal to_____________?
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A. Required interest rate

B. Quoted risk-free interest rate

C. Premium risk-free interest rate

D. Liquidity risk-free interest rate

83. Ability to trade at net price very quickly is classified as___________?
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A. Liquidity

B. Original trading

C. Fixed price trading

D. Offline trading

84. Which of the given area is NOT addressed by Business Finance?
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A. Managing day today expenses

B. Financing

C. Investing

D. None of the given options
85. Type of bond which pays interest payment only when it earns is classified as__________?
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A. Income bond

B. Payment bond

C. Earning bond

D. Interest bond

86. Net investment in operating capital is subtracted from net operating profit after taxes to calculate___________?
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A. Relevant inflows

B. Relevant outflows

C. Free cash flow

D. Cash outlay

87. Business Finance addresses which of the following?
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A. Capital budgeting

B. All of the given options

C. Working capital management

D. Capital structure

88. An average inflation rate which is expected over life of security is classified as__________?
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A. Required premium

B. Inflation premium

C. Off season premium

D. Nominal premium

89. If stock market price is higher than strike price so call option____________?
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A. Rate will be lower

B. Price will be lower

C. Price will be higher

D. Rate will be higher

90. Companies that help to set benchmarks are classified as__________?
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A. Analytical companies

B. competitive companies

C. Return companies

D. Benchmark companies
91. An outstanding bond are also classified as__________?
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A. Standing bonds

B. Dated bonds

C. Seasoned bonds

D. Outdated bonds

92. A type of project whose cash flows would not depend on each other is classified as______________?
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A. Net value projects

B. Dependent projects

C. Independent projects

D. Project net gain

93. Period costs include which of the following?
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A. Selling expense

B. Raw material

C. Direct labor

D. Manufacturing overhead

94. A techniques uses to identify financial statements trends are included____________?
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A. Common size analysis

B. Percent change analysis

C. Returning ratios analysis

D. Both A and B
95. Risk of fall in income due to fall in interest rates in future is classified as__________?
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A. Investment risk

B. Income risk

C. Reinvestment risk

D. Mature risk

96. In which type of market, new securities are traded?
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A. Tertiary market

B. None of the given options

C. Secondary market

D. Primary market
97. Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be_________?
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A. 1.93%

B. 1.925 times

C. $22,275

D. 15.71%
98. Profit margin multiply assets turnover multiply equity multiplier is used to calculate____________?
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A. Return on stock

B. Return on equity

C. Return on assets

D. Return on turnover

99. Process of comparing company results with other leading firms is considered as____________?
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A. Bench marking

B. Return analysis

C. Comparison

D. Analysis

100. You need Rs. 10,000 to buy a new television. If you have Rs. 6,000 to invest at 5 percent compounded annually, how long will you have to wait to buy the television?
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A. 10.51 years

B. 18.78 years

C. 8.42 years

D. 15.75 years