finance MCQs – Page 7

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 Review each marked answer and report any item that may be outdated or unclear.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

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

126. Price per share is $30 and an earnings per share is $3.5 then price for earnings ratio would be_____________?
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A. 11%

B. 8.57 times

C. 8.57%

D. 0.11 times

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

129. Which of the following is a series of constant cash flows that occur at the end of each period for some fixed number of periods?
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A. Ordinary annuity

B. None of the given options

C. Perpetuity

D. Annuity due

130. A major facet of financial management involves providing the financing necessary to support:
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A. Debts

B. Loans

C. Assets

D. Liabilities

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

138. Type of bonds that are issued by foreign governments or foreign corporations are classified as__________?
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A. Government bonds

B. Zero risk bonds

C. Foreign bonds

D. Zero bonds

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

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