finance MCQs – Page 8

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 Review each marked answer and report any item that may be outdated or unclear.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

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

146. During planning period, a marginal cost for raising a new debt is classified as__________?
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A. Borrowing cost

B. Debt cost

C. Relevant cost

D. Embedded cost

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

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

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