Finance MCQs

Option A: pledged bonds

Option B: serial bonds

Option C: series bonds

Option D: parallel bonds

Correct Answer: serial bonds ✔

Option A: Common Size Analysis

Option B: Horizontal Analysis 

Option C: Vertical Analysis

Option D: None of the Above

Correct Answer: Horizontal Analysis  ✔

Option A: Capital Structure

Option B: Debt Structure

Option C: Asset Structure

Option D: Capital Rationing

Correct Answer: Capital Rationing ✔

Option A: Systematic Risk

Option B: Idiosyncratic Risk

Option C: Financial Risk

Option D: Business Risk

Correct Answer: Systematic Risk ✔

Option A: Idiosyncratic Risk

Option B: Portfolio Risk

Option C: Capital Structure Risk

Option D: Systematic Risk

Correct Answer: Systematic Risk ✔

Option A: Operating Risk

Option B: Financial Risk

Option C: Debt Risk

Option D: Business Risk

Correct Answer: Operating Risk ✔

Option A: Dividend

Option B: Portfolio

Option C: Investment

Option D: BVPS

Correct Answer: Portfolio ✔

Option A: company

Option B: Corporation

Option C: Conglomerate

Option D: Bank

Correct Answer: Conglomerate ✔

Option A: clean price bonds

Option B: discount index bonds

Option C: premium index bonds

Option D: inflation index bonds

Correct Answer: inflation index bonds ✔

Option A: finance bonds

Option B: revenue bonds

Option C: financing bonds

Option D: project bonds

Correct Answer: revenue bonds ✔

Option A: evaluate cash flow

Option B: evaluate projects

Option C: evaluate budgeting

Option D: evaluate equity

Correct Answer: evaluate projects ✔

Option A: project net gain

Option B: independent projects

Option C: dependent projects

Option D: net value projects

Correct Answer: independent projects ✔

Option A: negative

Option B: zero

Option C: positive

Option D: independent

Correct Answer: negative ✔

Option A: 0.0319

Option B: 3.19

Option C: 0.31 times

Option D: 5450

Correct Answer: 0.0319 ✔

Option A: hurdle number

Option B: relative number

Option C: negative numbers

Option D: positive numbers

Correct Answer: positive numbers ✔

Option A: rise in marginal cost of capital

Option B: fall in marginal cost of capital

Option C: rise in transaction cost of capital

Option D: rise in transaction cost of capital

Correct Answer: rise in marginal cost of capital ✔

Option A: 25000

Option B: 28000

Option C: 33600

Option D: 30000

Correct Answer: 33600 ✔

Option A: maximum capital budget

Option B: greater capital budget

Option C: optimal capital budget

Option D: minimum capital budget

Correct Answer: optimal capital budget ✔

Option A: net present value method

Option B: net future value method

Option C: net capital budgeting method

Option D: net equity budgeting method

Correct Answer: net present value method ✔

Option A: terminal value

Option B: existed value

Option C: quit value

Option D: relative value

Correct Answer: terminal value ✔

Option A: normal costs

Option B: non-normal costs

Option C: non-normal cash flow

Option D: normal cash flow

Correct Answer: non-normal cash flow ✔

Option A: hurdle rate

Option B: capital rate

Option C: return rate

Option D: budgeting rate

Correct Answer: ✔

Option A: negative numbers

Option B: positive numbers

Option C: hurdle number

Option D: relative number

Correct Answer: negative numbers ✔

Option A: be accepted

Option B: not be accepted

Option C: have capital acceptance

Option D: have return rate acceptance

Correct Answer: be accepted ✔

Option A: minimum life

Option B: present value life

Option C: economic life

Option D: transaction life

Correct Answer: economic life ✔

Option A: technical equity

Option B: defined future value

Option C: project net present value

Option D: equity net present value

Correct Answer: project net present value ✔

Option A: present value consent

Option B: mutually exclusive

Option C: mutual project

Option D: mutual consent

Correct Answer: mutually exclusive ✔

Option A: present value of equity

Option B: future value of equity

Option C: present value cash flow

Option D: future value of cash flow

Correct Answer: present value cash flow ✔

Option A: non-normal cash flow

Option B: normal cash flow

Option C: normal costs

Option D: non-normal costs

Correct Answer: non-normal cash flow ✔

Option A: greater than two

Option B: equal to

Option C: less than one

Option D: greater than one

Correct Answer: greater than one ✔

Option A: negative index

Option B: exchange index

Option C: project index

Option D: profitability index

Correct Answer: profitability index ✔

Option A: abnormal costs

Option B: normal cash flows

Option C: abnormal cash flow

Option D: normal costs

Correct Answer: normal cash flows ✔

Option A: 8200

Option B: 16000

Option C: 0.0064

Option D: 1562.5

Correct Answer: 16000 ✔

Option A: optimal rationing

Option B: capital rationing

Option C: marginal rationing

Option D: transaction rationing

Correct Answer: capital rationing ✔

Option A: relative outflow

Option B: relative inflow

Option C: relative cost

Option D: relative profitability

Correct Answer: ✔

Option A: one

Option B: multiple

Option C: accepted

Option D: non-accepted

Correct Answer: multiple ✔

Option A: be reinvested

Option B: not be reinvested

Option C: be earned

Option D: not be earned

Correct Answer: be reinvested ✔

Option A: less project return

Option B: greater project return

Option C: shorter payback period

Option D: greater payback period

Correct Answer: shorter payback period ✔

Option A: negative projects

Option B: relative projects

Option C: evaluate projects

Option D: earned projects

Correct Answer: evaluate projects ✔

Option A: 0.55

Option B: 1.82

Option C: 0.55

Option D: 0.0182

Correct Answer: 1.82 ✔

Option A: negative

Option B: zero

Option C: positive

Option D: independent

Correct Answer: zero ✔

Option A: 3.46 years

Option B: 2.46 years

Option C: 5.46 years

Option D: 4.46 years

Correct Answer: 4.46 years ✔

Option A: negative internal rate of return

Option B: modified internal rate of return

Option C: existed internal rate of return

Option D: relative rate of return

Correct Answer: modified internal rate of return ✔

Option A: capital budgeting

Option B: cost budgeting

Option C: book value budgeting

Option D: equity budgeting

Correct Answer: capital budgeting ✔

Option A: long-term bonds

Option B: short-term bonds

Option C: internal term bonds

Option D: external term bonds

Correct Answer: long-term bonds ✔

Option A: payback period

Option B: forecasted period

Option C: original period

Option D: investment period

Correct Answer: payback period ✔

Option A: zero economic value added

Option B: percent economic value added

Option C: negative economic value added

Option D: positive economic value added

Correct Answer: negative economic value added ✔

Option A: greater annual annuity method

Option B: equivalent annual annuity

Option C: lesser annual annuity method

Option D: zero annual annuity method

Correct Answer: equivalent annual annuity ✔

Option A: discounted payback period

Option B: discounted rate of return

Option C: discounted cash flows

Option D: discounted project cost

Correct Answer: discounted payback period ✔

Option A: positive

Option B: negative

Option C: zero

Option D: one

Correct Answer: positive ✔

Option A: costs

Option B: cash flows

Option C: internal rate of return

Option D: external rate of return

Correct Answer: internal rate of return ✔

Option A: optimal capital budget

Option B: minimum capital budget

Option C: maximum capital budget

Option D: greater capital budget

Correct Answer: optimal capital budget ✔

Option A: p.v of hurdle rate

Option B: fv of hurdle rate

Option C: p.v of terminal value

Option D: fv of terminal value

Correct Answer: ✔

Option A: net loss profile

Option B: net gain profile

Option C: net future value profile

Option D: net present value profile

Correct Answer: net present value profile ✔

Option A: external return method

Option B: net present value of method

Option C: net future value method

Option D: internal return method

Correct Answer: net present value of method ✔

Option A: positive rate of return

Option B: negative rate of return

Option C: external rate of return

Option D: internal rate of return

Correct Answer: internal rate of return ✔

Option A: cash flow decision

Option B: cost decision

Option C: same decisions

Option D: different decisions

Correct Answer: same decisions ✔

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: shorter payback period

Option B: greater payback period

Option C: less project return

Option D: greater project return

Correct Answer: greater payback period ✔

Option A: transaction approach

Option B: replacement chain approach

Option C: common life approach

Option D: Both B and C

Correct Answer: Both B and C ✔

Option A: original period

Option B: investment period

Option C: payback period

Option D: forecasted period

Correct Answer: payback period ✔

Option A: negative economic value added

Option B: positive economic value added

Option C: zero economic value added

Option D: percent economic value added

Correct Answer: positive economic value added ✔

Option A: 5 years

Option B: 3.5 years

Option C: 4 years

Option D: 4.5 years

Correct Answer: 5 years ✔

Option A: valued relationship

Option B: economic relationship

Option C: direct relationship

Option D: inverse relationship

Correct Answer: direct relationship ✔

Option A: higher net present value

Option B: lower net present value

Option C: zero net present value

Option D: all of the above

Correct Answer: higher net present value ✔

Option A: positive

Option B: independent

Option C: negative

Option D: zero

Correct Answer: positive ✔

Option A: return on assets

Option B: return on multiplier

Option C: return on turnover

Option D: return on stock

Correct Answer: return on assets ✔

Option A: comparison

Option B: analysis

Option C: benchmarking

Option D: return analysis

Correct Answer: benchmarking ✔

Option A: 0.1675

Option B: 0.0268

Option C: 0.00373

Option D: 0.092

Correct Answer: 0.1675 ✔

Option A: low dividends paid

Option B: high risk prospect

Option C: high growth prospect

Option D: high marginal rate

Correct Answer: high growth prospect ✔

Option A: 0.025

Option B: 0.081

Option C: 0.004

Option D: 4 times

Correct Answer: 0.081 ✔

Option A: 22275

Option B: 0.1571

Option C: 0.01925

Option D: 1.925 times

Correct Answer: 0.1571 ✔

Option A: marginal ratios

Option B: equity ratios

Option C: return ratios

Option D: market value ratios

Correct Answer: market value ratios ✔

Option A: du DuPont equation

Option B: turnover equation

Option C: preference equation

Option D: common equation

Correct Answer: du DuPont equation ✔

Option A: return ratios

Option B: market value ratios

Option C: marginal ratios

Option D: equity ratios

Correct Answer: market value ratios ✔

Option A: high return on equity

Option B: high return on assets

Option C: low return on assets

Option D: low return on equity

Correct Answer: high return on assets ✔

Option A: return on turnover

Option B: return on stock

Option C: return on assets

Option D: return on equity

Correct Answer: return on equity ✔

Option A: price earnings ratio

Option B: earnings price ratio

Option C: pricing ratio

Option D: earnings ratio

Correct Answer: price earnings ratio ✔

Option A: equity multiplier

Option B: graphical multiplier

Option C: turnover multiplier

Option D: stock multiplier

Correct Answer: equity multiplier ✔

Option A: competitive companies

Option B: benchmark companies

Option C: analytical companies

Option D: return companies

Correct Answer: benchmark companies ✔

Option A: return on earnings power

Option B: return on investment

Option C: return on common equity

Option D: return on interest

Correct Answer: return on common equity ✔

Option A: 0.0007

Option B: 0.0714

Option C: 0.05 times

Option D: 7.15 times

Correct Answer: 0.0714 ✔

Option A: common size analysis

Option B: percent change analysis

Option C: returning ratios analysis

Option D: Both A and B

Correct Answer: Both A and B ✔

Option A: dividend to stock ratio

Option B: sales to growth ratio

Option C: cash flow to price ratio

Option D: price to cash flow ratio

Correct Answer: price to cash flow ratio ✔

Option A: return on total assets

Option B: return on total equity

Option C: return on debt

Option D: return on sales

Correct Answer: return on total assets ✔

Option A: 0.2673

Option B: 26.73 times

Option C: 0.094

Option D: 0.4 times

Correct Answer: 0.2673 ✔

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: 0.24 times

Option B: 4.16 times

Option C: 0.0416

Option D: 0.24

Correct Answer: 4.16 times ✔

Option A: 8.57 times

Option B: 0.0857

Option C: 0.11 times

Option D: 0.11

Correct Answer: 8.57 times ✔

Option A: 0.00114

Option B: 0.114

Option C: 0.12 times

Option D: 0.12

Correct Answer: 0.114 ✔

Option A: graphical analysis

Option B: preference analysis

Option C: common size analysis

Option D: returning analysis

Correct Answer: common size analysis ✔

Option A: Chief Financial Officer

Option B: Vice President of Operations

Option C: Chief Executive Officer

Option D: Board of Directors

Correct Answer: Chief Financial Officer ✔

Option A: Bancus

Option B: Banque

Option C: Bench

Option D: All of the above

Correct Answer: Banque ✔

Option A: bullish

Option B: bearish

Option C: hawkish

Option D: none of this

Correct Answer: bullish ✔

Option A: Capital

Option B: Deposit

Option C: Hoarding

Option D: None

Correct Answer: Deposit ✔

Option A: Tokyo

Option B: London

Option C: New York

Option D: None of these

Correct Answer: New York ✔

Option A: Booming

Option B: Bullish

Option C: Upward tendency

Option D: Hawkish

Correct Answer: Bullish ✔

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 ✔