finance Mcqs
302. In capital budgeting, a negative net present value results in _________?
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A. zero economic value added

B. percent economic value added

C. positive economic value added

D. negative economic value added
304. Mostly in financials, risk of portfolio is smaller than that of assets________?
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A. Negative correlation

B. Mean

C. Weighted average

D. Mean correlation

305. A theory which states that assets are traded at price equal to its intrinsic value is classified as___________________?
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A. Efficient market hypothesis

B. Inefficient money hypothesis

C. Efficient money hypothesis

D. Inefficient market hypothesis

306. If the net present value is positive then the profitability index will be ___________?
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A. greater than two

B. less than one

C. greater than one

D. equal to

307. An inflation free rate of return and inflation premium is two components of_________?
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A. Steeper rate

B. Quoted rate

C. Unquoted rate

D. Portfolio rate

308. In large expansion programs, the increased riskiness and the floatation 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 marginal cost of capital

D. rise in transaction cost of capital

314. The payback period in which an expected cash flows are discounted with the help of project cost of capital is classified as __________?
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A. discounted project cost

B. discounted cash flows

C. discounted rate of return

D. discounted payback period
315. The word Bank is derived from which of the following?
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A. Bancus

B. Banque

C. Bench

D. All of the above

317. Financial markets include___________?
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A. Capital markets

B. Physical asset markets

C. Primary markets

D. All of above
318. An analysis of decision making of investors and managers is classified as_________?
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A. Riskier finance

B. Behavioral finance

C. Premium finance

D. Buying finance

319. In capital budgeting, the term of bond which has great sensitivity to interest rates is __________?
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A. external term bonds

B. internal term bonds

C. long-term bonds

D. short-term bonds

320. The net present value, profitability index, payback and discounted payback are the methods to __________?
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A. evaluate projects

B. evaluate equity

C. evaluate budgeting

D. evaluate cash flow

321. The profit margin multiply assets turnover multiply equity multiplier is used to calculate __________?
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A. return on equity

B. return on stock

C. return on turnover

D. return on assets

322. An interest rate which is paid by money borrower and charged by lender is considered as_____________?
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A. Annual rate

B. Periodic rate

C. Annuity rate of return

D. Perpetuity rate of return

323. rate which is divided by compounding periods to calculate periodic rate must be___________________?
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A. Deferred annuity return

B. Semiannual discount rate

C. Nominal rate

D. Annuity return

324. Positive minimum risk portfolio of any security shows that market security sold____________?
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A. Equal to sum of stocks

B. Less than original price

C. Greater than original price

D. Equal to original price

325. Chance of occurrence of any event is classified as_____________?
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A. Event happening

B. Risk

C. Probability

D. Chance

330. Coefficient of beta is used to measure stock volatility_____________?
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A. Relative to market

B. Same with market

C. Ir-relative to market

D. Coefficient of market

332. In time value of money, nominal rate is_______________?
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A. Not shown on timeline

B. Shown on timeline

C. Multiplied on timeline

D. Divided on timeline

333. An unsystematic risk which can be eliminated but market risk is the__________?
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A. Ineffective risk

B. Aggregate risk

C. Effective risk

D. Remaining risk
335. The cash inflows are the revenues of project and are represented by ___________?
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A. hurdle number

B. positive numbers

C. relative number

D. negative numbers

336. Nominal rate which is quoted to consumers on loans is considered as__________?
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A. Annual percentage rate

B. Local rate of return

C. Annual rate of return

D. Loan rate of return

338. The price per ratio is divided by cash flow per share ratio, is used for calculating __________?
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A. dividend to stock ratio

B. price to cash flow ratio

C. sales to growth ratio

D. cash flow to price ratio

339. Number of shares outstanding if it is divided by net income for using to calculate___________?
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A. Book value of share

B. Dividends per share

C. Earning per share

D. Market value of shares

340. Stock which has higher correlation with market tend to have__________?
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A. Low beta, more risky

B. High beta, less risky

C. High beta, more risky

D. Low beta, less risky

341. Securities with less predictable prices and have longer maturity time is considered as_______________?
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A. Inventories

B. Long-term investments

C. Short-term investments

D. Cash equivalents

342. In balance sheet, sum of retained earnings and common stock are considered as_____________?
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A. Due equity

B. Common perpetuity

C. Preferred equity

D. Common equity
343. All partners have limited liability in_________________?
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A. Uncontrolled partnership

B. Controlled partnership

C. Unlimited liability partnership

D. Limited liability partnership
345. The low price for earnings ratio is the result of ____________?
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A. high riskier firms

B. high marginal rate

C. low riskier firms

D. low dividends paid

347. Financial security kept by non-financial corporations is____________________?
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A. Short term capital cost

B. Deposit cheque

C. Short term treasury bills

D. Distribution cost

349. Rise in stock market is called_______?
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A. bearish

B. bullish

C. hawkish

D. none of this

350. Loans by finance companies, banks and credit unions is classified as___________?
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A. Eurodollar market deposits

B. Consumer credit loans

C. Euro bonds

D. Dollar bonds