MCQOPTIONS
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MCQOPTIONS
This section includes 183 Mcqs, each offering curated multiple-choice questions to sharpen your Business knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
* projects which are mutually exclusive but different on scale of production or time of completion than the |
| A. | External return method |
| B. | Net present value of method |
| C. | Net future value method |
| D. | Internal return method |
| Answer» B. Net present value of method | |
| 2. |
A company sells its stock shares for raising more equity capital is classified as |
| A. | Dealer communication offering |
| B. | Seasoned equity offering |
| C. | Electronic equity offering |
| D. | Electronic order offering |
| Answer» B. Seasoned equity offering | |
| 3. |
A company that 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» B. Account receivable | |
| 4. |
A companys low earnings power and high interest cost cause financial changes, which have |
| A. | High return on equity |
| B. | High return on assets |
| C. | Low return on assets |
| D. | Low return on equity |
| Answer» B. High return on assets | |
| 5. |
A discount rate which is equal to present value of TV to project cost present value is classified as |
| A. | Negative internal rate of return |
| B. | Modified internal rate of return |
| C. | Existed internal rate of return |
| D. | Relative rate of return |
| Answer» B. Modified internal rate of return | |
| 6. |
The conflict of interest between stockholders and management is known as: |
| A. | Agency problem |
| B. | Interest conflict |
| C. | Management conflict |
| D. | Agency cost |
| Answer» B. Interest conflict | |
| 7. |
Which of the following is the process of planning and managing a firm?s long-term investments? |
| A. | Capital Structuring |
| B. | Capital Rationing |
| C. | Capital Budgeting |
| D. | Working Capital Management |
| Answer» D. Working Capital Management | |
| 8. |
Stocks in market portfolio are graphically represented with_____________? |
| A. | Dashed line |
| B. | Straight line |
| C. | Market line |
| D. | Risk line |
| Answer» B. Straight line | |
| 9. |
A type of business ownership in which two or more entities join together for profit purpose is classified as |
| A. | Partnership |
| B. | Joint business |
| C. | Joint profit |
| D. | Corporate business |
| Answer» B. Joint business | |
| 10. |
An amount invested is $1500 and an amount received is $2000 then dollar return would be |
| A. | 500 |
| B. | ?$500 |
| C. | 3500 |
| D. | ?$3500 |
| Answer» B. ?$500 | |
| 11. |
An amount invested is $2000 and dollar return is $200 then rate of return would be |
| A. | 0.001 |
| B. | 0.1 |
| C. | 1800 |
| D. | 2200 |
| Answer» C. 1800 | |
| 12. |
An amount invested is $2500 and an amount received is $1500 then dollar return will be |
| A. | ?$4000 |
| B. | 4000 |
| C. | ?$1000 |
| D. | 1000 |
| Answer» B. 4000 | |
| 13. |
An amount invested is $4000 and dollar return is $300 then rate of return will be |
| A. | 4300 |
| B. | 3700 |
| C. | 0.075 |
| D. | 0.00075 |
| Answer» D. 0.00075 | |
| 14. |
An amount of company retain earnings, return on equity and inflation are factors which effect |
| A. | Earnings growth |
| B. | Return on assets |
| C. | Return on sales |
| D. | Return on value |
| Answer» B. Return on assets | |
| 15. |
An attitude of investor towards dealing with risk determines the |
| A. | Rate of return |
| B. | Rate of exchange |
| C. | Rate of intrinsic stock |
| D. | Rate of extrinsic stock |
| Answer» B. Rate of exchange | |
| 16. |
According to Black Scholes model, short term seller receives todays price which |
| A. | Short term cash proceeds |
| B. | Proceeds in cheques |
| C. | Full cash proceeds |
| D. | Zero proceeds |
| Answer» B. Proceeds in cheques | |
| 17. |
According to Black Scholes model, stocks with call option pays the |
| A. | Dividends |
| B. | No dividends |
| C. | Current price |
| D. | Past price |
| Answer» B. No dividends | |
| 18. |
According to Black Scholes model, trading of securities and stock prices move respectively |
| A. | Constant and randomly |
| B. | Randomly and constant |
| C. | Randomly and continuously |
| D. | Continuously and randomly |
| Answer» B. Randomly and constant | |
| 19. |
Sum of market risk and diversifiable risk are classified as total risk which is equivalent to_______________? |
| A. | Variance |
| Answer» E. | |
| 20. |
Stock issued by company have higher rate of return because of______________? |
| A. | Low market to book ratio |
| B. | High book to market ratio |
| C. | High market to book ratio |
| D. | Low book to market ratio |
| Answer» C. High market to book ratio | |
| 21. |
Standard Corporation sold fully depreciated equipment for Rs.5,000. This transaction will be reported on the cash flow statement as a(n): |
| A. | Operating activity |
| B. | Investing activity |
| C. | Financing activity |
| D. | None of the given options |
| Answer» C. Financing activity | |
| 22. |
Tendency of measuring correlation of two variables is classified as_________? |
| A. | Tendency coefficient |
| B. | Variable coefficient |
| C. | Correlation coefficient |
| D. | Double coefficient |
| Answer» D. Double coefficient | |
| 23. |
Which of the following refers to the difference between the sale price and cost of inventory? |
| A. | Net loss |
| B. | Net worth |
| C. | Markup |
| D. | Markdown |
| Answer» D. Markdown | |
| 24. |
Who of the following make a broader use of accounting information? |
| A. | Accountants |
| B. | Financial Analysts |
| C. | Auditors |
| D. | Marketers |
| Answer» C. Auditors | |
| 25. |
Standard deviation of tighter probability distribution is____________? |
| A. | Long-termed |
| B. | Short-termed |
| C. | Riskier |
| D. | Smaller |
| Answer» E. | |
| 26. |
Situation in which firm limits expenditures on capital is classified as________? |
| A. | Optimal rationing |
| B. | Capital rationing |
| C. | Marginal rationing |
| D. | Transaction rationing |
| Answer» C. Marginal rationing | |
| 27. |
Tendency of moving together of two variables is classified as_____________? |
| A. | Correlation |
| B. | Move tendency |
| C. | Variables tendency |
| D. | Double tendency |
| Answer» B. Move tendency | |
| 28. |
Which of the following refers to the cash flows that result from the firm?s day-to-day activities of producing and selling? |
| A. | Operating Cash Flows |
| B. | Investing Cash Flows |
| C. | Financing Cash Flows |
| D. | All of the given options |
| Answer» B. Investing Cash Flows | |
| 29. |
Standard deviation is 18% and coefficient of variation is 1.5% an expected rate of return will be_____________? |
| A. | 27% |
| B. | 12% |
| C. | 19.50% |
| D. | none of above |
| Answer» C. 19.50% | |
| 30. |
A markets which deals with long-term corporate stocks are classified as |
| A. | Liquid markets |
| B. | Short-term markets |
| C. | Capital markets |
| D. | Money markets |
| Answer» D. Money markets | |
| 31. |
Stated value of bonds or face value is considered as_____________? |
| A. | State value |
| B. | Par value |
| C. | Bond value |
| D. | Per value |
| Answer» C. Bond value | |
| 32. |
Step in initial public offering in which hired agents act on behalf of owners is classified as______________? |
| A. | Hiring problems |
| B. | Agency problems |
| C. | Corporation internal problems |
| D. | Corporation external problems |
| Answer» C. Corporation internal problems | |
| 33. |
Which of the given area is NOT addressed by Business Finance? |
| A. | Financing |
| B. | Investing |
| C. | Managing day today expenses |
| D. | None of the given options |
| Answer» E. | |
| 34. |
Set of projects or set of investments usually maximize firm value is classified as_________? |
| A. | Optimal capital budget |
| B. | Minimum capital budget |
| C. | Maximum capital budget |
| D. | Greater capital budget |
| Answer» B. Minimum capital budget | |
| 35. |
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 |
| Answer» E. | |
| 36. |
Stocks which has high book for market ratio are considered as_____________? |
| A. | More risky |
| B. | Less risky |
| C. | Pessimistic |
| D. | Optimistic |
| Answer» B. Less risky | |
| 37. |
Business Finance addresses which of the following? |
| A. | Capital budgeting |
| B. | Capital structure |
| C. | Working capital management |
| D. | All of the given options |
| Answer» E. | |
| 38. |
Set of rules consisting of behavior towards its directors, creditors, shareholders, competitors and community is considered as____________? |
| A. | Agency governance |
| B. | Hiring governance |
| C. | Corporate governance |
| D. | External governance |
| Answer» D. External governance | |
| 39. |
Set of rules made by corporation founders such as directors election procedure are classified as_________? |
| A. | Stock laws |
| B. | By laws |
| C. | Liability laws |
| D. | Corporate laws |
| Answer» C. Liability laws | |
| 40. |
Value of payment is $25 and an interest rate is 2%, then present value will be |
| A. | 12.5 dollars |
| B. | 0.0008 dollars |
| C. | 1,250 dollars |
| D. | 0.8 dollars |
| Answer» B. 0.0008 dollars | |
| 41. |
Value of stock is $1000 and current value of portfolio is $1500 then obligation to cover call option will be |
| A. | 0.666 |
| B. | 2500 |
| C. | 0.015 |
| D. | 500 |
| Answer» E. | |
| 42. |
Value of stock is $1200 and preferred dividend is $120 then required rate of return would be |
| A. | 144000 |
| B. | 0.1 |
| C. | 10 |
| D. | 0.2 times |
| Answer» C. 10 | |
| 43. |
Value of stock is $250 and call option obligation is $100 then current value of portfolio would be |
| A. | 0.35 times |
| B. | 150 |
| C. | 350 |
| D. | 2.5 |
| Answer» C. 350 | |
| 44. |
Value of stock is $300 and preferred dividend is $60 then required rate of return would be |
| A. | 18000 |
| B. | 0.2 |
| C. | 20 |
| D. | 5 |
| Answer» C. 20 | |
| 45. |
Value of stock is $400 and required rate of return is 20% then preferred dividend would be |
| A. | 80 |
| B. | 8000 |
| C. | 20 |
| D. | 50 |
| Answer» B. 8000 | |
| 46. |
Unsecured bonds which are designated for only notes payable or all other debts are classified as |
| A. | Designated bonds |
| B. | Payable bonds |
| C. | Ordinate bonds |
| D. | Subordinated bonds |
| Answer» B. Payable bonds | |
| 47. |
Stock issued by company have lower rate of return because of___________? |
| A. | High market to book ratio |
| B. | Low book to market ratio |
| C. | Low market to book ratio |
| D. | High book to market ratio |
| Answer» C. Low market to book ratio | |
| 48. |
Techniques which are used to identify financial statements trends include |
| A. | Common size analysis |
| B. | Percent change analysis |
| C. | Returning ratios analysis |
| D. | Both A and B |
| Answer» B. Percent change analysis | |
| 49. |
Situation in which one project is accepted while rejecting an other project in comparison is classified as |
| A. | Present value consent |
| B. | Mutually exclusive |
| C. | Mutual project |
| D. | Mutual consent |
| Answer» B. Mutually exclusive | |
| 50. |
Special situation in which large projects are financed by with and securities claims on projects cash flow is classified as |
| A. | Claimed securities |
| B. | Project financing |
| C. | Stock financing |
| D. | Interest cost |
| Answer» B. Project financing | |