finance MCQs – Page 9

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 Review each marked answer and report any item that may be outdated or unclear.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
161. A technique uses in comparative analysis of financial statement is____________?
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A. Common size analysis

B. Returning analysis

C. Preference analysis

D. Graphical analysis

162. If net present value is positive, then profitability index will be__________?
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A. Less than one

B. Equal to

C. Greater than one

D. Greater than two

163. Which of the following is not a quality of IRR ?
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A. Ideal to rank the mutually exclusive investments

B. Can be estimated even without knowing the discount rate

C. Most widely used

D. Easily communicated and understood

164. Bonds issued by local and state governments with default risk are____________?
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A. Municipal bonds

B. Zero bonds

C. Default bonds

D. Corporation bonds

165. Choose from the following a symptom which is not relating to Over Trading?
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A. Low current ratio

B. High inventory turnover ratiO

C. Cash shortage

D. Low inventory turnover ratio
166. Coupon payment of bond which is fixed at time of issuance____________?
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A. Becomes low

B. Becomes stable

C. Remains same

D. Becomes change

167. Price per share divided by earnings per share is formula for calculating_________?
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A. Earning price ratio

B. Earning ratio

C. Price earnings ratio

D. Pricing ratio

168. A price for equity is called______________?
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A. Debt rate

B. Cost of equity

C. Investment return

D. Interest rate

169. A firm reports total liabilities of Rs. 300,000 and owners equity of Rs. 500,000. What would be the total worth of the firms assets?
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A. Rs. 300,000

B. Rs. 800,000

C. Rs. 500,000

D. Rs. 1100,000

170. Full Form of BCCI ?
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A. Bank of Commerce and Cooperation International

B. Bank of Central Cooperation International

C. None of These

D. Bank of Credit and Commerce International
171. The principal amount of a bond at issue is called____________?
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A. Present value of a lump sum

B. Par value

C. Coupon value

D. Present value of an annuity

172. Finance is vital for which of the following business activity (activities)?
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A. Marketing Research

B. All of the given options

C. Design of marketing and distribution channels

D. Product Pricing

173. Which of the following refers to the cash flows that result from the firm?s day-to-day activities of producing and selling?
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A. Investing Cash Flows

B. Operating Cash Flows

C. All of the given options

D. Financing Cash Flows

174. Projects which are mutually exclusive but different on scale of production or time of completion then the___________?
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A. External return method

B. Net future value method

C. Net present value of method

D. Internal return method

175. In independent projects evaluation, results of internal rate of return and net present value lead to_____________?
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A. Cost decision

B. Different decisions

C. Same decisions

D. Cash flow decision

176. Which of the following terms refers to the use of debt financing?
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A. Manufacturing Leverage

B. Financial Leverage

C. None of the given options

D. Operating Leverage

177. Which of the following statement about bond ratings is TRUE?
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A. Bond ratings are typically paid for by a companys bondholders.

B. Bond ratings represent an independent assessment of the credit-worthiness of bonds.

C. Bond ratings are based solely on information acquired from sources other than the bond issuer.

D. None of the given options

178. A firm has paid out Rs. 150,000 as dividends from its net income of Rs. 250,000. What is the retention ratio for the firm?
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A. 60%

B. 25%

C. 12%

D. 40%
179. An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax__________?
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A. Market premium

B. Cost of debt

C. Term structure

D. Risk premium

180. Maturity date decides at time of issuance of bond and legally permissible is classified as____________?
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A. Valued maturity

B. Original maturity

C. Artificial maturity

D. Permanent maturity