Finance Mcqs – (Management Sciences) MCQs Latest For FPSC, PPSC, NTS, KPPSC, SPSC & Other Tests
“ Finance Mcqs “. Tab this page to check “Latest Finance MCQs” for the preparation of competitive mcqs, FPSC mcqs, PPSC mcqs, SPSC mcqs, KPPSC mcqs, AJKPSC mcqs, BPSC mcqs, NTS mcqs, PTS mcqs, OTS mcqs, Atomic Energy mcqs, Pak Army mcqs, Pak Navy mcqs, CTS mcqs, ETEA mcqs and others. The most occurred mcqs of Finance in past papers. Past papers of Finance mcqs. Past papers of Finance MCQs. Finance Mcqs are the necessary part of any competitive / job related exams. The Finance mcqs having specific numbers in any written test. It is therefore everyone have to learn / remember the related Finance mcqs. The Important series of Finance Mcqs are given below:
High price to earnings ratio shows company’s_________?
A. High risk prospect
B. Low dividends paid
C. High growth prospect
D. High marginal rate
Return on assets = 5.5%, Total assets $3,000 and common equity $1,050 then return on equity would be_________?
A. 1.93%
B. 15.71%
C. $22,275
D. 1.925 times
Net income available to stockholders is $150 and total assets are $2,100 then return on total assets would be_________?
A. 0.05 times
B. 7.14%
C. 0.07%
D. 7.15 times
A technique uses in comparative analysis of financial statement is_________?
A. Preference analysis
B. Graphical analysis
C. Common size analysis
D. Returning analysis
Price per share is $30 and an earnings per share is $3.5 then price for earnings ratio would be___________?
A. 8.57 times
B. 0.11 times
C. 8.57%
D. 11%
Set of rules made by corporation founders such as directors election procedure are classified as_________?
A. Liability laws
B. By laws
C. Stock laws
D. Corporate laws
Legal entity separation from its legal owners and managers with help of state laws is classified as____________?
A. Limited corporate business
B. Corporation
C. Controlled corporate business
D. Unlimited corporate business
Notes, mortgages, bonds, stocks, treasury bills and consumer loans are classified as______________?
A. Financial instruments
B. Primary assets
C. Capital assets
D. Competitive instruments
Set of rules consisting of behavior towards its directors, creditors, shareholders, competitors and community is considered as____________?
A. Hiring governance
B. Agency governance
C. Corporate governance
D. External governance
Price for debt is called_________?
A. Investment return
B. Debt rate
C. Discount rate
D. Interest rate
In financial markets, period of maturity less than one year of financial instruments is classified as________________?
A. Short-term
B. Intermediate term
C. Long-term
D. Mid-term
A markets which deals with long-term corporate stocks are classified as
A. Short-term markets
B. Liquid markets
C. Capital markets
D. Money markets
Bonds issued to individuals by corporations are classified as__________?
A. U.S treasury bonds
B. Corporate bonds
C. Municipal bonds
D. Mortgages
Markets dealing loans of autos, education, vacations and appliances are considered as__________?
A. Consumer credit loans
B. Residential markets
C. Commercial markets
D. Mortgage markets
Capital gain expected by stockholders and dividends are included in____________?
A. Investment return
B. Debt rate
C. Interest rate
D. Cost of equity
In weighted average cost of capital, rising in interest rate leads to_________________?
A. Increase capital structure
B. Increase in cost of debt
C. Decrease in cost of debt
D. Decrease capital structure
An interest rate which is paid by firm as soon as it issues debt is classified as pre-tax__________?
A. Market premium
B. Term structure
C. Risk premium
D. Cost of debt
In weighted average cost of capital, capital components are funds that usually offer by____________?
A. Capitalist
B. Investors
C. Stock market
D. Exchange index
Capital budgeting decisions are analyzed with help of weighted average and for this purpose____________?
A. Common stock value is used
B. Component cost is used
C. Cost of capital is used
D. Asset valuation is used
Finance Mcqs
Risk free rate is subtracted from expected market return is considered as___________?
A. Diversifiable risk
B. Country risk
C. Equity risk premium
D. Market risk premium
Beta which is estimated as regression slope coefficient is classified as___________?
A. Historical beta
B. Coefficient beta
C. Market beta
D. Riskier beta
In weighted average capital, capital structure weights estimation does not rely on value of__________?
A. Market value of equity
B. Investors equity
C. Book value of equity
D. Stock equity
Method uses for an estimation of cost of equity is classified as___________?
A. Future cash flow method
B. Market cash flow
C. Discounted cash flow method
D. Present cash flow method
Variability for expected returns for projects is classified as___________?
A. Variable risk
B. Stand-alone risk
C. Expected risk
D. Returning risk
A risk associated with project and way considered by well diversified stockholder is classified as______________?
A. Industry risk
B. Beta risk
C. Expected risk
D. Returning risk
During planning period, a marginal cost for raising a new debt is classified as__________?
A. Borrowing cost
B. Relevant cost
C. Debt cost
D. Embedded cost
If coupon rate is more than going rate of interest, then bond will be sold________?
A. Seasoned par value
B. More than its par value
C. At par value
D. Below its par value
Type of bond in which payments are made on basis of inflation index is classified as_____________?
A. Surplus bond
B. Purchasing power bond
C. Borrowed bond
D. Deficit bond
Price of an outstanding bond decreases when market rate is_______________?
A. Increased
B. Earned
C. Decreased
D. Never changed
Right held with corporations to call issued bonds for redemption is considered as___________?
A. Redeem provision
B. Call provision
C. Artificial provision
D. Original provision
Required rate of return in calculating bond’s cash flow is also classified as_______?
A. Yield
B. Going rate of return
C. Earning rate
D. Both A and B
If default probability is zero and bond is not called, then yield to maturity is_____________?
A. Lower than expected return rate
B. Mature expected return rate
C. Higher than expected return rate
D. Equal to expected return rate
Cash flows that could be generated from an owned asset by company but not use in project are classified as_________________?
A. Mean cost
B. Occurred cost
C. Opportunity costs
D. Weighted cost
Relevant cash flow which company expects when its will implement project is classified as_____________?
A. Relevant cash flow
B. Irrelevant cash flow
C. Incremental cash flow
D. Decrease cash flow
Nominal interest rates and nominal cash flows are usually reflected the____________?
A. Inflation effects
B. Equity effects
C. Opportunity effects
D. Debt effects
In cash flow estimation, depreciation shelters company’s income from_______?
A. Salvages
B. Expansion
C. Taxation
D. Discounts
Weighted average cost of debt, preferred stock and common equity is classified as_____________?
A. Cost of interest
B. Cost of salvage
C. Cost of taxation
D. Cost of capital
In cash flow estimation and risk analysis, real rate will be equal to nominal rate if there is__________?
A. No inflation
B. No transactions
C. High inflation
D. No acceleration
Rate of return which is required to satisfy stockholders and debt holders is classified as__________?
A. Weighted average cost of interest
B. Weighted average cost of capital
C. Weighted average salvage value
D. Mean cost of capital
In cash flow estimation, depreciation is considered as________________?
A. Cash flow discounts
B. Non cash charge
C. Cash charge
D. Net salvage discount
Net investment in operating capital is subtracted from net operating profit after taxes to calculate___________?
A. Relevant outflows
B. Free cash flow
C. Relevant inflows
D. Cash outlay
Real interest rate and real cash flows do not include_____________?
A. Debt effects
B. Equity effects
C. Inflation effects
D. Opportunity effects
Real rate expected cash flows and nominal rate expected cash flows must be______________?
A. Different
B. Equal
C. Accelerated
D. Inflated
Double declining balance method and sum of years digits are included in__________?
A. Single methods
B. Yearly method
C. Double methods
D. Accelerated methods
Interest rates, tax rates and market risk premium are factors which an/a_____________?
A. Industry cannot control
B. Industry must control
C. Firm must control
D. Firm cannot control
In retention growth model, payout ratio is subtracted from one to calculate___________?
A. Future value ratio
B. Present value ratio
C. Retention ratio
D. Growth ratio
Current option price is added to present value of portfolio for calculating_________?
A. Future value of stock
B. Current value of stock
C. Future value of portfolio
D. Present value of portfolio
If stock market price is higher than strike price so call option____________?
A. Rate will be higher
B. Price will be lower
C. Price will be higher
D. Rate will be lower
Projects which are mutually exclusive but different on scale of production or time of completion then the___________?
A. Net future value method
B. Net present value of method
C. External return method
D. Internal return method
Long period of bond maturity leads to_________?
A. More price changes
B. Standing prices
C. Stable prices
D. Mature prices
If coupon rate is equal to going rate of interest, then bond will be sold________?
A. At par value
B. More than its par value
C. Below its par value
D. Seasoned par value
Risk of fall in income due to fall in interest rates in future is classified as__________?
A. Investment risk
B. Income risk
C. Reinvestment risk
D. Mature risk
As free bonds issue for welfare by industrial agencies or pollution control agencies are classified as__________?
A. Development bonds
B. Agent bonds
C. Pollution control bonds
D. Both B and C
Financial security with low degree risk and investment held by businesses is classified as________________?
A. Commercial paper
B. Treasury bills
C. Negotiable certificate of deposit
D. Money market mutual funds
Document in a corporation which consists of amount of stock, name and addresses of directors is classified as_____________?
A. Stock planning
B. Liability plan
C. Corporation paperwork
D. Charter
A price for equity is called______________?
A. Debt rate
B. Cost of equity
C. Interest rate
D. Investment return
Hewlett-Packard and Microsoft are examples of__________?
A. Unlimited corporate business
B. Limited corporate business
C. Controlled corporate business
D. Corporation
Type of financial security in which firms do not borrow money rather lease their assets is classified as____________________?
A. Leases
B. Common stocks
C. Preferred stocks
D. Corporate stocks
Ability to trade at net price very quickly is classified as___________?
A. Offline trading
B. Liquidity
C. Original trading
D. Fixed price trading
Price of stock that companies observe in financial markets is called____________?
A. Market price
B. Extrinsic price
C. Intrinsic price
D. Fundamental price
Collection of money from investors and spending money in other investment activities is classified as__________________?
A. Retirement funds
B. Hedge funds
C. Future funds
D. Pension funds
In financial markets, period of maturity within one to five years of financial instruments is classified as_________________?
A. Long-term
B. Short-term
C. Intermediate term
D. Capital term
Bonds which are riskier than corporate bonds and are issued by major corporations are classified as___________?
A. Corporate stocks
B. Common stocks
C. Leases
D. Preferred stocks
Markets for products such as wheat, rice, cotton, real estate and autos dealing is classified as___________?
A. Physical asset markets
B. Competitive markets
C. Intangible assets
D. Easy markets
Professionals such as doctors, accountants and lawyers often make corporations are classified as____________?
A. Professional corporation
B. General professionals
C. Professional association
D. Both B and C
Firm’s promise to pay and is backed or guaranteed by bank is classified as____________?
A. Federal acceptance
B. Banker’s acceptance
C. Customer’s acceptance
D. Treasury acceptance
Markets which deals with high liquid and short-term debt securities are classified as_____________?
A. Liquid markets
B. Money markets
C. Capital markets
D. Short-term markets
Bonds issue by corporations which are more riskier than preferred stocks are classified as_____________?
A. Preferred stocks
B. Leases
C. Common stocks
D. Corporate stocks
Financial markets include___________?
A. Capital markets
B. Primary markets
C. Physical asset markets
D. All of above
Loans by finance companies, banks and credit unions is classified as___________?
A. Consumer credit loans
B. Eurodollar market deposits
C. Dollar bonds
D. Euro bonds
Method of matching orders by posting orders of buying and selling is classified as______________?
A. Electronic communication network
B. Electronic stock network
C. Electronic dealer network
D. Electronic order network
Funds which are used as interest-bearing checking accounts are classified as____________?
A. Money market funds
B. Money mutual funds
C. Capital market funds
D. Insurance money funds
Federal Reserve policy and federal surplus or deficit of budget affect the____________?
A. Opportunity cost
B. Cost of money
C. Cost of production
D. Inflation risk
Transfer through institutions such as mutual funds or banks are classified as________________?
A. Savers intermediary
B. Financial intermediary
C. Non-financial intermediary
D. Discounted intermediary
Market where market makers keep record of stock of financial instruments is classified as_________________?
A. Outcry auction system
B. Dealer market
C. Stock market
D. Face to face communication
Money lends to corporations by banks is classified as___________?
A. Consumer credit loans
B. Commercial loans
C. Eurodollar market deposits
D. Consumer credit loans
Future beta is needed to calculate in most situations is classified as____________?
A. Historical betas
B. Standard betas
C. Adjusted betas
D. Varied betas
Beta reflects stock risk for investors which is usually_________?
A. Individual
B. Weighted
C. Collective
D. Linear
Difference between actual return on stock and predicted return is considered as___________?
A. Actual error
B. Probability error
C. Prediction error
D. Random error
If book value is greater than market value comparison with investors for future stock are considered as_______________?
A. Pessimistic
B. Experienced
C. Optimistic
D. Inexperienced
An unsystematic risk which can be eliminated but market risk is the__________?
A. Effective risk
B. Remaining risk
C. Aggregate risk
D. Ineffective risk
Stocks which has lower book for market ratio are considered as__________?
A. More risky
B. Optimistic
C. Less risky
D. Pessimistic
An efficient set of portfolios represented through graph is classified as an__________?
A. Inefficient frontier
B. Efficient frontier
C. Attained frontier
D. Unattainable frontier
Stocks which has high book for market ratio are considered as_____________?
A. More risky
B. Pessimistic
C. Less risky
D. Optimistic
If market value is greater than book value, then investors for future stock are considered as___________________?
A. Inexperienced
B. Experienced
C. Pessimistic
D. Optimistic
In capital market line, risk of efficient portfolio is measured by its____________?
A. Standard deviation
B. Aggregate risk
C. Variance
D. Ineffective risk
A high portfolio return is subtracted from low portfolio return to calculate_________?
A. HML portfolio
B. Subtracted portfolio
C. R portfolio
D. Addition Poftfolio
According to capital asset pricing model assumptions, investors will borrow unlimited amount of capital at any given___________?
A. Fixed rate of interest
B. Risk free rate of interest
C. Identical and fixed returns
D. Risk free expected return
According to capital asset pricing model assumptions, quantities of all assets are______________?
A. Given and fixed
B. Not given and variable
C. Not given and fixed
D. Given and variable
According to capital asset pricing model assumptions, variances, expected returns and co-variance of all assets are__________?
A. Identical
B. Fixed
C. Not identical
D. Variable
Stock issued by company have higher rate of return because of______________?
A. High market to book ratio
B. High book to market ratio
C. Low market to book ratio
D. Low book to market ratio
All assets are perfectly divisible and liquid in___________?
A. Cost free pricing model
B. Tax free pricing model
C. Capital asset pricing model
D. Stock pricing model
Betas tend to move towards 1.0 with passage of time are classified as__________?
A. Varied betas
B. Standard betas
C. Historical betas
D. Adjusted betas
In capital asset pricing model, characteristic line is classified as____________?
A. Regression line
B. Scattered points
C. Probability line
D. Weighted line
A theory which states that assets are traded at price equal to its intrinsic value is classified as___________________?
A. Inefficient market hypothesis
B. Efficient market hypothesis
C. Efficient money hypothesis
D. Inefficient money hypothesis
Type of relationship exists between an expected return and risk of portfolio is classified as___________?
A. Fixed and aggregate
B. Linear
C. Non-linear
D. Non-fixed and non-aggregate
In capital asset pricing model, assumptions must be followed including________?
A. No transaction costs
B. No taxes
C. Fixed quantities of assets
D. All of above
Stock issued by company have lower rate of return because of___________?
A. Low market to book ratio
B. Low book to market ratio
C. High market to book ratio
D. High book to market ratio