MCQOPTIONS
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MCQOPTIONS
This section includes 2436 Mcqs, each offering curated multiple-choice questions to sharpen your Commerce knowledge and support exam preparation. Choose a topic below to get started.
| 2301. |
A portfolio which lies below the efficient frontier is described as________________. |
| A. | optimal |
| B. | unattainable |
| C. | dominant |
| D. | dominated |
| Answer» E. | |
| 2302. |
The weak form of the EMH is supported if successive price changes over time are________. |
| A. | independent of each other |
| B. | negative |
| C. | positive |
| D. | lagged |
| Answer» B. negative | |
| 2303. |
The amount of current assets that varies with seasonal requirements is referred to as __________ working capital. |
| A. | Permanent |
| B. | Net |
| C. | Temporary |
| D. | Gross |
| Answer» D. Gross | |
| 2304. |
If a market is inefficient, as new information is received about a security____________. |
| A. | nothing will happen |
| B. | the stock price will fall at first and then later rise |
| C. | there will be a lag in the adjustment of the stock price |
| D. | there will be negative demand for the stock |
| Answer» D. there will be negative demand for the stock | |
| 2305. |
Which of the following techniques of project appraisal does not consider the time value of money? |
| A. | Benefit cost ratio |
| B. | Net present value |
| C. | Internal rate of return |
| D. | Accounting Rate of Return |
| Answer» E. | |
| 2306. |
Money market funds were a financial innovation partly inspired to circumvent __________. |
| A. | Regulation Q, which is no longer in existence |
| B. | Regulation M |
| C. | Regulation D |
| D. | Regulation B, which is still in existence |
| Answer» B. Regulation M | |
| 2307. |
The risk that arises due to change in the purchasing power is called ? |
| A. | Financial risk |
| B. | Interest rate risk |
| C. | Business risk |
| D. | Inflation risk |
| Answer» E. | |
| 2308. |
Speculators in the futures markets_____________. |
| A. | make the market more volatile |
| B. | contribute liquidity to the market |
| C. | engage mainly in short sales |
| D. | serve no real economic function |
| Answer» D. serve no real economic function | |
| 2309. |
Value of payment is Rs 25 and an interest rate is 2%, then present value will be |
| A. | Rs 12.54 |
| B. | Rs 12,500.00 |
| C. | Rs 12,504.00 |
| D. | Rs 8,400.00 |
| Answer» D. Rs 8,400.00 | |
| 2310. |
Prices of bonds will be increased if interest rates |
| A. | equals |
| B. | lump sum declines |
| C. | rises |
| D. | declines |
| Answer» E. | |
| 2311. |
Securities future value is Rs 1,000,000 and present value of securities is Rs 500,000 with an interest rate of 4.5%, 'N' will be |
| A. | 16.7473 years |
| B. | 0.0304 months |
| C. | 15.7473 years |
| D. | 0.7575 years |
| Answer» D. 0.7575 years | |
| 2312. |
In uneven cash flow, 'IRR' is an abbreviation of an |
| A. | internal rate of return |
| B. | international rate of return |
| C. | intrinsic rate of return |
| D. | investment return rate |
| Answer» B. international rate of return | |
| 2313. |
If deposited money Rs 10,000 in bank pays interest 10% annually, an amount after five years will be |
| A. | Rs 16,105.14 |
| B. | Rs 16,110.14 |
| C. | Rs 16,115.14 |
| D. | Rs 16,505.14 |
| Answer» B. Rs 16,110.14 | |
| 2314. |
Finance company providing loans at 3% with five compounding periods per year, nominal annual rate is classified as |
| A. | 15.00% |
| B. | 0.60% |
| C. | 10.00% |
| D. | 1.67% |
| Answer» B. 0.60% | |
| 2315. |
Dividends paid to common shareholders and divided by common shares outstanding are equals to |
| A. | earning per share |
| B. | dividends per share |
| C. | book value of share |
| D. | market value of shares |
| Answer» C. book value of share | |
| 2316. |
Future value of annuity FVA(due) is, if deposited value is Rs 100 and earn 5% every year of total three years will be |
| A. | Rs 99.49 |
| B. | Rs 318.25 |
| C. | Rs 315.25 |
| D. | Rs 331.01 |
| Answer» E. | |
| 2317. |
If coupon rate is less than going rate of interest then bond will be sold |
| A. | seasoned par value |
| B. | more than its par value |
| C. | seasoned par value |
| D. | at par value |
| Answer» C. seasoned par value | |
| 2318. |
Price of an outstanding bond increases when market rate |
| A. | never changes |
| B. | increases |
| C. | decreases |
| D. | earned |
| Answer» D. earned | |
| 2319. |
Bonds issued by local and state governments with default risk are |
| A. | municipal bonds |
| B. | corporation bonds |
| C. | default bonds |
| D. | zero bonds |
| Answer» B. corporation bonds | |
| 2320. |
Rate of interest which is usually discussed by investors whenever rate of return is discussed is classified as |
| A. | yield to maturity |
| B. | yield to return |
| C. | yield to earning |
| D. | yield to investors |
| Answer» B. yield to return | |
| 2321. |
Real risk-free interest rate in addition with an inflation premium is equal to |
| A. | required interest rate |
| B. | quoted risk-free interest rate |
| C. | liquidity risk-free interest rate |
| D. | premium risk-free interest rate |
| Answer» C. liquidity risk-free interest rate | |
| 2322. |
Type of bond in which payments are made on basis of inflation index is classified as |
| A. | borrowed bond |
| B. | purchasing power bond |
| C. | surplus bond |
| D. | deficit bond |
| Answer» C. surplus bond | |
| 2323. |
Rate on debt that increases as soon market rises is classified as |
| A. | rising bet rate |
| B. | floating rate debt |
| C. | market rate debt |
| D. | stable debt rate |
| Answer» C. market rate debt | |
| 2324. |
Type of options that permit bond holder to buy stocks at stated price are classified as |
| A. | provision |
| B. | guarantee |
| C. | warrants |
| D. | convertibles |
| Answer» D. convertibles | |
| 2325. |
Which of the following is / are assumption(s) underlying the Miller and Modigliani analysis? |
| A. | Capital markets are perfect |
| B. | Investors are assumed to be rational and behave accordingly |
| C. | There is no corporate or personal income tax |
| D. | All of the above. |
| Answer» E. | |
| 2326. |
Which of the following has helped to eliminate the use of stock certificates by placing stock transactions on computers? |
| A. | Demat account |
| B. | Securities Exchange Commission |
| C. | Depository Trust Company |
| D. | Federal Depository Insurance Corporation. |
| Answer» B. Securities Exchange Commission | |
| 2327. |
Ownership securities are represented by _______. |
| A. | stock |
| B. | loan |
| C. | debt |
| D. | debentures |
| Answer» B. loan | |
| 2328. |
The probability of bankrupt is higher. |
| A. | for a levered firm than an unlevered firm |
| B. | for an unlevered firm than a levered firm |
| C. | only levered firm |
| D. | only unlevered firm |
| Answer» D. only unlevered firm | |
| 2329. |
In finance, "working capital" means the same thing as |
| A. | total assets |
| B. | fixed assets |
| C. | current assets |
| D. | current assets minus current liabilities. |
| Answer» E. | |
| 2330. |
Which of the following factors does not affect the capital structure of a company? |
| A. | Cost of capital |
| B. | Composition of the current assets |
| C. | Size of the company |
| D. | Expected nature of cash flows |
| Answer» C. Size of the company | |
| 2331. |
If market interest rates are expected to rise, you would expect___________. |
| A. | bond prices to fall more than stock prices |
| B. | bond prices to rise more than stock prices |
| C. | stock prices to fall more than bond prices |
| D. | stock prices to rise and bond prices to fall. |
| Answer» B. bond prices to rise more than stock prices | |
| 2332. |
This type of risk is avoidable through proper diversification. |
| A. | portfolio risk |
| B. | systematic risk |
| C. | unsystematic risk |
| D. | total risk |
| Answer» D. total risk | |
| 2333. |
Finance company providing loans at 12% with 2 compounding periods per year, periodic rate is classified as |
| A. | 3% per quarter |
| B. | 6% per quarter |
| C. | 6% per year |
| D. | 0.1667 % per year |
| Answer» D. 0.1667 % per year | |
| 2334. |
Left side of balance sheet states the |
| A. | appreciated earnings |
| B. | liabilities |
| C. | assets |
| D. | stocks earnings |
| Answer» C. assets | |
| 2335. |
Company who sells products to customer without demanding immediate payment but record it in balance sheet as |
| A. | account payable |
| B. | account receivable |
| C. | account equivalent |
| D. | account investment |
| Answer» C. account equivalent | |
| 2336. |
Non cash revenues are Rs 500,000 and net income is Rs 950,000 then net cash flow would be |
| A. | Rs 475,000.00 |
| B. | Rs 485,000.00 |
| C. | Rs 1,450,000.00 |
| D. | Rs 450,000.00 |
| Answer» E. | |
| 2337. |
Method of inventory recording gives lower cost of goods sold in income statement is classified as |
| A. | last in first out |
| B. | last out receivable |
| C. | First out receivable |
| D. | First in first out |
| Answer» E. | |
| 2338. |
An investment outlay cash flow is Rs 4000, operating cash flow is Rs 1000 and salvage cash flow is Rs 5000 then free cash flow would be |
| A. | Rs 10,000.00 |
| B. | Rs 8,000.00 |
| C. | Rs 0.00 |
| D. | none of above |
| Answer» B. Rs 8,000.00 | |
| 2339. |
Free cash flow is Rs 15000 and net investment in operating capital is Rs 9000 then net operating profit after taxes will be |
| A. | Rs 24,000.00 |
| B. | Rs 6,000.00 |
| C. | -Rs 6,000.00 |
| D. | -Rs 24,000.00 |
| Answer» B. Rs 6,000.00 | |
| 2340. |
Real interest rate and real cash flows do not include |
| A. | equity effects |
| B. | debt effects |
| C. | inflation effects |
| D. | opportunity effects |
| Answer» D. opportunity effects | |
| 2341. |
An operating cash flows is Rs 12000 and gross fixed asset expenditure is Rs 5000 then free cash flow will be |
| A. | -Rs 7,000.00 |
| B. | Rs 7,000.00 |
| C. | Rs 17,000.00 |
| D. | -Rs 17,000.00 |
| Answer» C. Rs 17,000.00 | |
| 2342. |
If NAV > market price of a fund, then the fund____________. |
| A. | is selling at a discount |
| B. | is selling at a premium |
| C. | is an index fund |
| D. | is an exchange traded fund. |
| Answer» C. is an index fund | |
| 2343. |
Financial leverage is also known as. |
| A. | Trading on equity |
| B. | Trading on debt |
| C. | Interest on equity |
| D. | Interest on debt |
| Answer» B. Trading on debt | |
| 2344. |
Variable cost per unit. |
| A. | varies with the level of output |
| B. | remains constant irrespective of the level of output |
| C. | changes with the growth of the firm |
| D. | does not change with volume of production |
| Answer» B. remains constant irrespective of the level of output | |
| 2345. |
Fixed cost per unit _______. |
| A. | does not change with volume of production |
| B. | be flexible according to the rate of interest |
| C. | changes according to volume of production |
| D. | not remains constant |
| Answer» B. be flexible according to the rate of interest | |
| 2346. |
According to the traditional approach cost of capital affected by? |
| A. | debt-equity mix |
| B. | debt-capital mix |
| C. | equity expenses mix |
| D. | debt-interest mix |
| Answer» B. debt-capital mix | |
| 2347. |
Which one of the following is not a money market securities? |
| A. | Treasury bills |
| B. | National savings certificate |
| C. | Certificate of deposit |
| D. | Commercial paper |
| Answer» C. Certificate of deposit | |
| 2348. |
The underwriter has to take up ________________. |
| A. | the fixed portions of the issue capital |
| B. | the unsubscribed part of the agreed portion |
| C. | the agreed portion or can refuse if |
| D. | the unfixed portions of the issue capital |
| Answer» C. the agreed portion or can refuse if | |
| 2349. |
In large expansion programs, increased riskiness and floatation cost associated with project can cause |
| A. | rise in marginal cost of capital |
| B. | fall in marginal cost of capital |
| C. | rise in transaction cost of capital |
| D. | rise in transaction cost of capital |
| Answer» B. fall in marginal cost of capital | |
| 2350. |
Net present value, profitability index, payback and discounted payback are methods to |
| A. | evaluate cash flow |
| B. | evaluate projects |
| C. | evaluate budgeting |
| D. | evaluate equity |
| Answer» C. evaluate budgeting | |