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Finance Mcqs
___________ is concerned with the acquisition, financing, and management of assets with
some overall goal in mind.
A. Financial management
B. Profit maximization
C. Agency theory
D. Social responsibility
A. Acquisition of assets
B. Financing of assets
C. Management of assets
D. All of them
The investment decision is the most important of the firms three major decisions, when it
comes to:
A. Value creation
B. Value addition
C. Value proposition
D. Value deletion
Annual cash dividends divided by annual earnings; or alternatively, dividends per share
divided by earning per share is termed as:
A. Before Tax
B. After Tax
C. Both A and B
D. None of Them
D. None of Them
An individual authorized by another person, called the principle, to act on the latters on
behalf is known as an/a:
A. Agent
B. Servant
C. Subordinate
D. Assistant
Stakeholders include:
A. Stakeholders
B. Creditors and customs
C. Employees and suppliers
D. All of Them
All the constituencies with a stake in the fortunes of the company are termed as:
A. Stakeholders
B. Directors
C. Chief executives
D. Subordinates
The system by which companies are managed and controlled is known as:
A. Management System
B. Strategic System
C. Corporate Governance
D. Internal System
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Corporate governance encompasses the relationship among a companys:
A. Managerial activities
B. Year-to-Year activities
C. Day-to-Day activities
D. Financial activities
A. Liabilities
B. Debts
C. Loans
D. Assets
The market price of a firms stock represents the focal judgment of all market participants
as to the value of the:
A. Particular market
B. Particular firm
C. Particular creditor
D. Particular debtor
Agency theory suggests that managers(the agents), particularly those of large , publically-
owned firms, may have different objectives from those of the:
A. Workers
B. Subordinates
C. Shareholders
D. Employees
A. Selling expense
B. Raw material
C. Direct labor
D. Manufacturing overhead
Product costs include which of the following?
A. Selling expenses
B. General expenses
C. Manufacturing overhead
D. Administrative expenses
A. Profit Margin
B. Total Assets Turnover
C. Debt-equity ratio
D. None of the given options
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Which of the following refers to the cash flows that result from the firms day-to-day
activities of producing and selling?
A. Marketing Research
B. Product Pricing
C. Design of marketing and distribution channels
D. All of the given options
Which of the following costs are reported on the income statement as the cost of goods
sold?
A. Product cost
B. Period cost
C. Both product cost and period cost
D. Neither product cost nor period cost
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?
A. 5 days
B. 36 days
C. 48 days
D. 73 days
A. Operating Leverage
B. Financial Leverage
C. Manufacturing Leverage
D. None of the given options
A. Primary market
B. Secondary market
C. Tertiary market
D. None of the given options
A. Liquidity Ratios
B. Long-term Solvency Ratios
C. Profitability Ratios
D. Market Value Ratios
A. Current Ratio
B. Acid-test Ratio
C. Cash Ratio
D. Solvency Ratio
A portion of profits, which a company retains itself for further expansion, is known as:
A. Dividends
B. Retained Earnings
C. Capital Gain
D. None of the given options
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Which of the following set of ratios is used to assess a businesss ability to generate
earnings as compared to its expenses and other relevant costs incurred during a specific
period of time?
A. Liquidity Ratios
B. Leverage Ratios
C. Profitability Ratios
D. Market Value Ratios
A company having a current ratio of 1 will have __________ net working capital.
A. Positive
B. Negative
C. zero
D. None of the given options
The difference between current assets and current liabilities is known as____________?
A. Surplus Asset
B. Short-term Ratio
C. Working Capital
D. Current Ratio
A. Par value
B. Coupon value
C. Present value of an annuity
D. Present value of a lump sum
Which of the following is the process of planning and managing a firms long-term
investments?
A. Capital Structuring
B. Capital Rationing
C. Capital Budgeting
D. Working Capital Management
A. a common-size statement
B. an income statemen
C. a cash flow statement
D. a balance sheet
A series of constant cash flows that occur at the end of each period for some fixed number
of periods is ____________ .
A. an ordinary annuity
B. annuity due
C. multiple cash flows
D. perpetuity
Which of the following is the overall return the firm must earn on its existing assets to
maintain the value of the stock?
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Which of the following is known as the group of assets such as stocks and bonds held by an
investor ?
A) Stock Bundle
B) Portfolio
C) Capital Structure
D) None of the given options
Which of the following relationships holds TRUE if a bond sells at a discount?
A. Bond Price < Par Value and YTM > coupon rate
B. Bond Price > Par Value and YTM > coupon rate
C. Bond Price > Par Value and YTM < coupon rate D. Bond Price < Par Value and YTM <
coupon rate
Which of the following strategy belongs to restrictive policy regarding size of investments
in current assets?
When real rate is high, all the interest rates tend to be ___________?
A) Higher
B) Lower
C) Constant
D) None of the given options
A. -1
B. 0
C. 1
D. 2
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