finance Mcqs
401. In capital asset pricing model, characteristic line is classified as____________?
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A. Regression line

B. Scattered points

C. Probability line

D. Weighted line

403. Weighted average of probabilities is classified as____________?
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A. Past rate of return

B. Average rate of return

C. Weighted rate of return

D. Expected rate of return
404. Two alternative expected returns are compared with help of__________?
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A. Coefficient of deviation

B. Coefficient of standard

C. Coefficient of return

D. Coefficient of variation
405. The profitability index in capital budgeting is used for __________?
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A. evaluate projects

B. relative projects

C. earned projects

D. negative projects

406. A companys low earnings power and high interest cost cause financial changes, which have ___________?
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A. low return on assets

B. high return on assets

C. low return on equity

D. high return on equity

407. In the mutually exclusive projects, the project which is selected for comparison with others must have _________?
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A. all of the above

B. zero net present value

C. higher net present value

D. lower net present value

410. A formula of after-tax component cost of debt is___________?
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A. Borrowing cost + embedded cost

B. Interest rate + tax savings

C. Marginal tax-required return

D. Interest rate-tax savings
411. Future value of interest if it is calculated two times a year can be a classified as__________________?
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A. Annual discounting

B. Semiannual discounting

C. Annual compounding

D. Semiannual compounding
412. Stock issued by company have higher rate of return because of______________?
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A. Low book to market ratio

B. High book to market ratio

C. Low market to book ratio

D. High market to book ratio

413. The process in which the managers of the company identify projects to add value is classified as __________?
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A. capital budgeting

B. cost budgeting

C. equity budgeting

D. book value budgeting

414. Project which is started by firm for increasing sales is classified as______________?
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A. Old expanded project

B. Firm borrowing project

C. Product line selection

D. New expansion project
415. Firms promise to pay and is backed or guaranteed by bank is classified as____________?
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A. Federal acceptance

B. Customers acceptance

C. Treasury acceptance

D. Bankers acceptance
416. According to market risk premium, an amount of risk premium depends upon investor______________?
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A. Market aversion

B. Risk aversion

C. Portfolio aversion

D. Risk taking

417. In capital market line, risk of efficient portfolio is measured by its____________?
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A. Variance

B. Ineffective risk

C. Standard deviation

D. Aggregate risk

418. An information uses by investors for expecting future earnings is all recorded in__________?
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A. Exchange report

B. Annual report

C. Stock report

D. Five years report

420. Method of matching orders by posting orders of buying and selling is classified as______________?
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A. Electronic stock network

B. Electronic order network

C. Electronic dealer network

D. Electronic communication network
423. Accounts payable, accruals and notes payable are listed on balance sheet as________?
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A. Non-current liabilities

B. Accumulated liabilities

C. Current liabilities

D. Accrued liabilities

425. Other factors held constant, the greater project liquidity is because of ___________?
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A. shorter payback period

B. greater payback period

C. greater project return

D. less project return

426. In calculation of net cash flow, depreciation and amortization are treated as________?
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A. Non-cash charges

B. Current liabilities

C. Income expenses

D. Non-cash revenues

427. An equity multiplier is multiplied to return on assets to calculate __________?
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A. return on assets

B. return on turnover

C. return on multiplier

D. return on stock

428. In capital budgeting, an internal rate of return of the project is classified as its __________?
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A. negative rate of return

B. positive rate of return

C. external rate of return

D. internal rate of return
429. Values recorded as determined in marketplace are considered as_______________?
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A. Book values

B. Market values

C. Appreciated values

D. Depreciated values

430. Payment if it is divided with interest rate will be formula of__________?
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A. Due perpetuity

B. Present value of perpetuity

C. Future value of perpetuity

D. Deferred perpetuity

432. In capital budgeting, an internal rate of return of project is classified as its__________?
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A. Negative rate of return

B. Positive rate of return

C. External rate of return

D. Internal rate of return
433. When the stock market is rising it is called__________?
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A. Hawkish

B. Booming

C. Upward tendency

D. Bullish
436. A regulatory body which licenses brokers and oversees traders is classified as__________?
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A. International association of network dealers

B. International firm of auction system

C. National association of securities dealers

D. National firm of equity dealers

439. A portfolio consists of all stocks in a market is classified as____________?
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A. Correlated portfolio

B. Market portfolio

C. Diversified portfolio

D. Return portfolio

441. The cash flows occurring with more than one change in sign of cash flow are classified as __________?
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A. non-normal costs

B. normal costs

C. non-normal cash flow

D. normal cash flow

442. The number of years forecasted to recover an original investment is classified as ___________?
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A. investment period

B. original period

C. forecasted period

D. payback period
443. The high price to earnings ratio shows companies ____________?
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A. high growth prospect

B. high marginal rate

C. high risk prospect

D. low dividends paid

445. Condition in which companys imports are more than its exports is classified as____________?
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A. Foreign trade deficits

B. Trade surplus

C. Foreign trade

D. Foreign trade surplus

446. Process of selling company stock at large to general public and get lending from banks is classified as an_________________?
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A. Internal public offering

B. External public offering

C. Unprofessional offering

D. Initial public offering
447. Cost of money is affected by factors which includes______________?
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A. Inflation

B. All of above

C. Risk

D. Production opportunities

448. The set of projects or set of investments to maximize the firm value is classified as __________?
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A. greater capital budget

B. maximum capital budget

C. minimum capital budget

D. optimal capital budget
449. Markets which bring closer institutions needing funds and with surplus funds are classified as______________?
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A. Financial markets

B. Retirement planners

C. Corporate institutions

D. Hedge firms

450. All assets are perfectly divisible and liquid in___________?
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A. Cost free pricing model

B. Stock pricing model

C. Capital asset pricing model

D. Tax free pricing model