Financial Management MCQs

A. 0.86%
B. 1.16%
C. 2.50%
D.−2.5%

Correct Answer: 1.16% ✔

Option A: Dividends

Option B: No dividends

Option C: Current price

Option D: Past price

Correct Answer: No dividends ✔

Option A: Interest rate-tax savings

Option B: Marginal tax-required return

Option C: Interest rate + tax savings

Option D: Borrowing cost + embedded cost

Correct Answer: Interest rate-tax savings ✔

Option A: Industry Beta

Option B: Market Beta

Option C: Subtracted Beta

Option D: Fundamental Beta

Correct Answer: Fundamental Beta ✔

Option A: Valuation manager

Option B: Common stockholders

Option C: Asset seller

Option D: Equity dealer

Correct Answer: Common stockholders ✔

Option A: 7%

Option B: 8%

Option C: 1.78%

Option D: 25%

Correct Answer: 7% ✔

Option A: Sunk cost

Option B: Occurred cost

Option C: Weighted cost

Option D: Mean cost

Correct Answer: Sunk cost ✔

Option A: New expansion project

Option B: Old expanded project

Option C: Firm borrowing project

Option D: Product line selection

Correct Answer: New expansion project ✔

Option A: Relevant cash flows

Option B: Irrelevant cash flows

Option C: Marginal cash flows

Option D: Transaction cash flows

Correct Answer: Relevant cash flows ✔

Option A: Redeemable at deferred

Option B: Redeemable at par

Option C: Redeemable at refund

Option D: Redeemable at finding

Correct Answer: Redeemable at par ✔

Option A: Present value bond

Option B: Original issue discount bond

Option C: Coupon issued bond

Option D: Discounted bond

Correct Answer: Original issue discount bond ✔

Option A: One

Option B: Multiple

Option C: Accepted

Option D: Non-accepted

Correct Answer: Multiple ✔

Option A: External rate of return

Option B: Internal rate of return

Option C: Positive rate of return

Option D: Negative rate of return

Correct Answer: Internal rate of return ✔

Option A: Original period

Option B: Investment period

Option C: Payback period

Option D: Forecasted period

Correct Answer: Payback period ✔

Option A: 16.75%

Option B: 2.68%

Option C: 0.37%

Option D: 9.20%

Correct Answer: 16.75% ✔

Option A: Low riskier firms

Option B: High riskier firms

Option C: Low dividends paid

Option D: High marginal rate

Correct Answer: Low riskier firms ✔

Option A: Short-term options

Option B: Long-term options

Option C: Short money options

Option D: Yearly call

Correct Answer: Long-term options ✔

Option A: Put option

Option B: Call option

Option C: Money back options

Option D: Out of money options

Correct Answer: Put option ✔

Option A: Low volatility

Option B: Interest rates are high

Option C: Interest rates are low

Option D: High volatility

Correct Answer: Interest rates are high ✔

Option A: Longer option period

Option B: Smaller option period

Option C: Lesser price

Option D: Higher price

Correct Answer: Longer option period ✔

Option A: Due option

Option B: Covered option

Option C: Undue option

Option D: Uncovered option

Correct Answer: Covered option ✔

Option A: Put investor

Option B: Call investor

Option C: Hedger

Option D: Volatile hedge

Correct Answer: Hedger ✔

Option A: Shorter call option

Option B: Longer call option

Option C: Longer put option

Option D: Shorter put option

Correct Answer: Longer call option ✔

Option A: Option value equal to one

Option B: Option value will increase

Option C: Option value will decrease

Option D: Option value equal to zero

Correct Answer: Option value will increase ✔

Option A: Discount rate

Option B: Transaction costs

Option C: No transaction costs

Option D: No discounts

Correct Answer: Transaction costs ✔

Option A: Option lattice

Option B: Pricing movement

Option C: Price change

Option D: Binomial lattice

Correct Answer: Binomial lattice ✔

Option A: Savings associations

Option B: Loans associations

Option C: Preferred and common associations

Option D: Savings and loans associations

Correct Answer: Savings and loans associations ✔

Option A: Debit unions

Option B: Life insurance companies

Option C: Credit unions

Option D: Auto purchases

Correct Answer: Life insurance companies ✔

Option A: Financial services corporations

Option B: Common service corporations

Option C: Preferred service corporations

Option D: Commercial service corporations

Correct Answer: Financial services corporations ✔

Option A: International firm of auction system

Option B: International association of network dealers

Option C: National firm of equity dealers

Option D: National association of securities dealers

Correct Answer: National association of securities dealers ✔

Option A: Exchange traded fund

Option B: Management expense

Option C: Money trade fund

Option D: Capital trade fund

Correct Answer: Exchange traded fund ✔

Option A: Hiring problems

Option B: Agency problems

Option C: Corporation internal problems

Option D: Corporation external problems

Correct Answer: Agency problems ✔

Option A: Budget surplus

Option B: Budget deficit

Option C: Federal reserve

Option D: Federal budget

Correct Answer: Budget surplus ✔

Option A: U.S treasury bonds

Option B: Mortgages

Option C: Municipal bonds

Option D: Corporate bonds

Correct Answer: Municipal bonds ✔

Option A: Unlimited liability partnership

Option B: Limited liability partnership

Option C: Controlled partnership

Option D: Uncontrolled partnership

Correct Answer: Limited liability partnership ✔

Option A: Residential markets

Option B: Mortgage markets

Option C: Agriculture markets

Option D: Commercial markets

Correct Answer: Mortgage markets ✔

Option A: Municipal bonds

Option B: Corporate bonds

Option C: U.S treasury bonds

Option D: Mortgages

Correct Answer: Mortgages ✔

Option A: Saving intermediaries

Option B: Discounted intermediaries

Option C: Money market securities

Option D: Capital market securities

Correct Answer: Money market securities ✔

Option A: Intermediate term

Option B: Capital term

Option C: Short-term

Option D: Long-term

Correct Answer: Long-term ✔

Option A: Average cost of capital

Option B: Mean cost of capital

Option C: Weighted cost of capital

Option D: Weighted average cost of capital

Correct Answer: Weighted average cost of capital ✔

Option A: Debit funds

Option B: Credit funds

Option C: Mutual funds

Option D: Insurance funds

Correct Answer: Mutual funds ✔

Option A: Financial markets

Option B: Corporate institutions

Option C: Hedge firms

Option D: Retirement planners

Correct Answer: Financial markets ✔

Option A: Venture partners

Option B: Corporate partners

Option C: Limited partners

Option D: General partners

Correct Answer: Limited partners ✔

Option A: Initial public offering

Option B: External public offering

Option C: Internal public offering

Option D: Unprofessional offering

Correct Answer: Initial public offering ✔

Option A: Production opportunities

Option B: Risk

Option C: All of above

Option D: Inflation

Correct Answer: Inflation ✔

Option A: Foreign trade

Option B: Foreign trade deficits

Option C: Foreign trade surplus

Option D: Trade surplus

Correct Answer: Foreign trade ✔

Option A: Deposit cheque

Option B: Distribution cost

Option C: Short term treasury bills

Option D: Short term capital cost

Correct Answer: Short term treasury bills ✔

Option A: Financial instruments

Option B: Financial asset markets

Option C: Physical asset markets

Option D: Easy markets

Correct Answer: Financial asset markets ✔

Option A: Dollar bonds

Option B: Euro deposits

Option C: Eurodollar market deposits

Option D: Euro bonds

Correct Answer: Eurodollar market deposits ✔

Option A: Market price

Option B: Intrinsic price

Option C: Extrinsic price

Option D: Unstable price

Correct Answer: Intrinsic price ✔

Option A: Rate of return

Option B: Rate of exchange

Option C: Rate of intrinsic stock

Option D: Rate of extrinsic stock

Correct Answer: Rate of return ✔

Option A: Dashed line

Option B: Straight line

Option C: Market line

Option D: Risk line

Correct Answer: Dashed line ✔

Option A: $1,100

Option B: $3,400

Option C: $2,200

Option D: $3,500

Correct Answer: $1,100 ✔

Option A: Accrued liabilities

Option B: Current liabilities

Option C: Accumulated liabilities

Option D: Non-current liabilities

Correct Answer: Current liabilities ✔

Option A: Debt liabilities

Option B: Preferred stock

Option C: Hybrid stock

Option D: Common liabilities

Correct Answer: Preferred stock ✔

Option A: Market values

Option B: Book values

Option C: Appreciated values

Option D: Depreciated values

Correct Answer: Market values ✔

Option A: Annuity due

Option B: Payment fixed series

Option C: Ordinary annuity

Option D: Deferred annuity

Correct Answer: Annuity due ✔

Option A: Accumulated depreciation

Option B: Depleted depreciation

Option C: Accumulated appreciation

Option D: Accumulated appreciation schedule

Correct Answer: Accumulated depreciation ✔

Option A: Increased cash

Option B: Decreased cash

Option C: Increased liabilities

Option D: Increased equity

Correct Answer: Decreased cash ✔

Option A: Semiannual discounting

Option B: Annual discounting

Option C: Annual compounding

Option D: Semiannual compounding

Correct Answer: Semiannual compounding ✔

Option A: Annuity return

Option B: Deferred annuity return

Option C: Nominal rate

Option D: Semiannual discount rate

Correct Answer: Nominal rate ✔

Option A: Extended life

Option B: Perpetuity

Option C: Deferred perpetuity

Option D: Due perpetuity

Correct Answer: Perpetuity ✔

Option A: Hybrid stock

Option B: Common liabilities

Option C: Debt liabilities

Option D: Preferred stock

Correct Answer: Preferred stock ✔

Option A: Increases liabilities

Option B: Increases equity

Option C: Increases cash

Option D: Decreases cash

Correct Answer: Increases cash ✔

Option A: Compounding

Option B: Discounting

Option C: Money value

Option D: Stock value

Correct Answer: Discounting ✔

Option A: Number of payment periods

Option B: Number of investment

Option C: Number of installments

Option D: Number of premium received

Correct Answer: Number of payment periods ✔

Option A: Future value of perpetuity

Option B: Present value of perpetuity

Option C: Due perpetuity

Option D: Deferred perpetuity

Correct Answer: Present value of perpetuity ✔

Option A: Not shown on timeline

Option B: Shown on timeline

Option C: Multiplied on timeline

Option D: Divided on timeline

Correct Answer: Shown on timeline ✔

Option A: Cash flow of financing activities

Option B: Cash flow per share

Option C: Cash flow of investment

Option D: Cash flow of operations

Correct Answer: Cash flow per share ✔

Option A: Fixed payment investment

Option B: Lump sum amount

Option C: Fixed interval investment

Option D: Annuity

Correct Answer: Annuity ✔

Option A: Rises

Option B: Declines

Option C: Equals

Option D: None of above

Correct Answer: Rises ✔

Option A: Inventories

Option B: Short-term investments

Option C: Cash equivalents

Option D: Long-term investments

Correct Answer: Cash equivalents ✔

Option A: Annual percentage rate

Option B: Annual rate of return

Option C: Loan rate of return

Option D: Local rate of return

Correct Answer: Annual percentage rate ✔

Option A: Amortized loan

Option B: Depreciated loan

Option C: Appreciated loan

Option D: Repaid payments

Correct Answer: Amortized loan ✔

Option A: Depreciation

Option B: Amortization

Option C: Stock amortization

Option D: Perishable assets

Correct Answer: Amortization ✔

Option A: Annual rate

Option B: Periodic rate

Option C: Perpetuity rate of return

Option D: Annuity rate of return

Correct Answer: Periodic rate ✔

Option A: Tangible asset

Option B: Non-tangible assets

Option C: Financial asset

Option D: Financial liability

Correct Answer: Tangible asset ✔

Option A: Free cash flow

Option B: Retained cash flow

Option C: Net cash flow

Option D: Financing cash flow

Correct Answer: Net cash flow ✔

Option A: Last in first out

Option B: Last out receivable

Option C: First out receivable

Option D: First in first out

Correct Answer: First in first out ✔

Option A: Non-cash revenues

Option B: Non-cash charges

Option C: Current liabilities

Option D: Income expense

Correct Answer: Non-cash charges ✔

Option A: Investment return rate

Option B: Internal rate of return

Option C: International rate of return

Option D: Intrinsic rate of return

Correct Answer: Internal rate of return ✔

Option A: Five years report

Option B: Annual report

Option C: Stock report

Option D: Exchange report

Correct Answer: Annual report ✔

Option A: Cash equivalents

Option B: Long-term investments

Option C: Inventories

Option D: Short-term investments

Correct Answer: Short-term investments ✔

Option A: Appreciation

Option B: Depreciation

Option C: Appreciated assets

Option D: Appreciated liabilities

Correct Answer: Depreciation ✔

Option A: Preferred equity

Option B: Due equity

Option C: Common perpetuity

Option D: Common equity

Correct Answer: Common equity ✔

Option A: Compounding

Option B: Discounting

Option C: Money value

Option D: Stock value

Correct Answer: Compounding ✔

Option A: Net income

Option B: Net earnings

Option C: Net expenses

Option D: Net revenues

Correct Answer: Net income ✔

Option A: Earning per share

Option B: Dividends per share

Option C: Book value of share

Option D: Market value of shares

Correct Answer: Earning per share ✔

Option A: Preferred stockholders

Option B: Common stockholders

Option C: Hybrid stockholders

Option D: Debt holders

Correct Answer: Preferred stockholders ✔

Option A: Current liabilities

Option B: Income expenses

Option C: Non-cash revenues

Option D: Non-cash charges

Correct Answer: Non-cash charges ✔

Option A: Depreciation and amortization

Option B: Net sales

Option C: Net profit

Option D: Net income

Correct Answer: Depreciation and amortization ✔

Option A: Not shown on timeline

Option B: Shown on timeline

Option C: Multiplied on timeline

Option D: Divided on timeline

Correct Answer: Not shown on timeline ✔

Option A: Preferred stock account

Option B: Common stock account

Option C: Due stock account

Option D: Preceded stock account

Correct Answer: Common stock account ✔

Option A: 27%

Option B: 12%

Option C: 19.50%

Option D: none of above

Correct Answer: 12% ✔

Option A: Alpha coefficient

Option B: Beta coefficient

Option C: Stand-alone coefficient

Option D: Relevant coefficient

Correct Answer: Beta coefficient ✔

Option A: Average rate of return

Option B: Expected rate of return

Option C: Past rate of return

Option D: Weighted rate of return

Correct Answer: Expected rate of return ✔

Option A: Risk taking

Option B: Risk aversion

Option C: Market aversion

Option D: Portfolio aversion

Correct Answer: Risk aversion ✔

Option A: Alpha

Option B: Beta

Option C: Variance

Option D: Market relevance

Correct Answer: Beta ✔

Option A: Negativity

Option B: Positivity

Option C: Correlation

Option D: Diversification

Correct Answer: Diversification ✔

Option A: Mean

Option B: Weighted average

Option C: Mean correlation

Option D: Negative correlation

Correct Answer: Weighted average ✔