Business Studies/Corporate Finance MCQ Set 1 Sample Test,Sample questions

Question:
 A company having easy access to the capital markets can follow a ____________. dividend policy

1. liberal.

2.formal

3.strict

4.Varying


Question:
 A fixed rate of ____________is payable on debentures.

1.dividend

2.commission

3.interest

4.brokerage


Question:
 A fixed rate of ____________is payable on debentures.

1.dividend

2.commission

3.interest

4.brokerage


Question:
 Arbitrage is the level processing technique introduced in ____________.

1.. Net income approach

2. MM approach

3.Operating approach

4.Traditional approach.


Question:
 Factoring is a form of financing ___.

1.payable.

2.receivables

3.borrowings

4.debts


Question:
 Finance function is one of the most important functions of ____________.

1.business.

2.marketing

3.financial

4.debt


Question:
 Financial leverage helps one to estimate ____________.

1. the business risk

2.the financial risk

3.both risks

4.production risk.


Question:
 Future value interest factor takes ____

1. Compounding rate

2.Discounting rate.

3.Inflation rate

4.Deflation rate.


Question:
 ICICI was formed in _______:

1.1955

2.1665

3.1965

4.1954


Question:
 If the payback is a bad rule, the average returns on book value is ____________.

1.worse.

2.better

3.the best

4.equal


Question:
 lndustrial Development Bank of India is

1.Wholly-owned Government of India undertaking

2.Wholly-owned subsidiary of Reserve Bank of India

3.A corporation and owned by the Government of India and public sector banks

4.Public Limited Company


Question:
 Medium-term notes (MTNs) have maturities that range up to

1.one year (but no more)

2. two years (but no more).

3. ten years (but no more)

4.thirty years (or more)


Question:
 The financial institute IFCI established in

1. 1947

2.1948

3.1949

4.1950


Question:
 The formula for cost of debt is __________.

1. kd=(1/2+f-p)/f+p

2.f+p

3. f-P

4. f*p


Question:
A demerit of IRR method is that it does not distinguish between ____________.

1. lending & borrowing

2.discounting & non- discounting

3.cash flow & non- cash flow

4. inflow & outflow.


Question:
A way to analyze whether debt or lease financing would be preferable is to:

1.compare the net present values under each alternative, using the cost of capital as the discount rate.

2.compare the net present values under each alternative, using the after-tax cost of borrowing as the discount rate.

3.compare the payback periods for each alternative.

4.compare the effective interest costs involved for each alternative


Question:
Beta measures the ____________.

1. A. Financial risk.

2.Investment risk rate

3. Market risk

4.Market and finance risk.


Question:
Capital budgeting decisions in India cannot be reversed due to ____.

1.economic conditions.

2.ill-organized market for second-hand capital goods

3.government regulations.

4.policy of the management


Question:
Capital budgeting is related to ____

1.long terms assets.

2.short term assets.

3. long terms and short terms assets

4.fixed assets.


Question:
Corporation is not a part of ____________finance .

1. Public.

2.Private

3. Public & private

4.Organization


Question:
Cost of retained earnings is equal to ____________.

1.Cost of equity.

2.Cost of debt.

3.Cost of term loans

4.Cost of bank loan.


Question:
Effective cost of debentures is ____________as compared to shares

1.higher

2.lower

3.equal

4.medium


Question:
Financial decisions involve ____________.

1. Investment, financing and dividend decisions.

2.Investment sales decisions.

3.Financing cash decisions

4.Investment dividend decisions.


Question:
Financial leverage is also known as ____________.

1. Trading on equity

2.Trading on debt.

3. Interest on equity.

4.Interest on debt.


Question:
Financial leverage measures ____________.

1.sensitivity of EBIT with respect of 1% change with respect to output

2.1% variation in the level of production .

3.C. sensitivity of EPS with respect to 1% change in level of EBIT

4. no change with EBIT and EPS.


Question:
Financial leverage measures ____________.

1.sensitivity of EBIT with respect of 1% change with respect to output

2.1% variation in the level of production .

3.C. sensitivity of EPS with respect to 1% change in level of EBIT

4. no change with EBIT and EPS.


Question:
Financial security with low degree risk and investment held by businesses is classified as

1.treasury bills

2.commercial paper

3. negotiable certificate of deposit

4.money market mutual funds


Question:
Fixed cost per unit ____________.

1.changes according to the volume of production

2.be flexible according to the rate of interest.

3.does not change with the volume of production

4.remains constant.


Question:
Future value interest factor takes ____________.

1.Compounding rate

2.Discounting rate

3.Inflation rate

4.Deflation rate


Question:
Future value interest factor takes ____________.

1.. Compounding rate

2.Discounting rate

3. Inflation rate

4. Deflation rate


Question:
Greater the size of a business unit ____ will be the requirements of working capital.

1. lower.

2.no change.

3.larger

4.fixed


Question:
Headquarter of ICICI Bank is located at:

1.. Mumbai

2.Hyderabad

3.Mysore

4.Bangalore


Question:
In his traditional role the finance manager is responsible for ______

1.arrange of utilization of funds.

2.arrangement of financial resources.

3.acquiring capital assets of the organization.

4.effective management of capital


Question:
In his traditional role the finance manager is responsible for ___________.

1.proper utilisation of funds

2. arrangement of financial resources

3.acquiring capital assets of the organization

4.Efficient management of capital


Question:
Market value of the shares are decided by ____________.

1. the respective companies.

2.the investment market

3.the government.

4. shareholders.


Question:
Net present value is a popular method which falls ____________.

1.Within non- discount cash flow method.

2.Within discount cash flow method

3. Equal Within non- discount cash flow method

4.No discount cash flow


Question:
Net working capital is the excess of current asset over ____________.

1.. Current liability.

2.Net liability.

3.Total payable.

4.Total liability.


Question:
Net working capital refers to.

1. total assets minus fixed assets

2.current assets minus current liabilities

3.current assets minus inventories

4.current assets.


Question:
Net working capital refers to.

1. total assets minus fixed assets

2.current assets minus current liabilities

3.current assets minus inventories

4.current assets.


Question:
Offering cash discount to customers result is ____________.

1.reducing the average collection period.

2.increasing the average collection period

3.increasing sales

4.decreasing sales.


Question:
Operating incomes and the discount rate of a particular risk class are the 2 factors determining ____________.

1.Dependence hypothesis

2.Traditional view.

3.Modern view

4.Independence hypothesis.


Question:
Operating leverage = ______..

1. A. contribution less profit.

2.contribution less sales

3.contribution less total expenses

4.contribution less operating profit


Question:
Operating leverage measures ____________.

1. A. the business risk.

2.financial risk

3.both risks

4.production risk.


Question:
Operating leverage x financial leverage= _____.

1. composite leverage.

2.financial composite leverage.

3.operating composite leverage

4.fixed leverage


Question:
Ordering cost is the cost of ____________materials.

1. selling.

2.purchasing

3.stocking

4.financing


Question:
Ownership securities are represented by ____________.

1. securities.

2.equities

3.debt

4.debentures


Question:
Payback period is superior to other methods, if the objective of the investor is to ____________.

1.consider cash flow in its entirety

2.consider the present value of future cash flows

3.consider the liquidity

4.consider the inflows in its entirety.


Question:
Present value takes ____________.

1. A. Compounding rate.

2. Discounting rate.

3.Inflation rate

4.Deflation rate.


Question:
Shares having no face value are known as ____

1.no-par stock.

2. at par stock

3.equal stock

4.debt-equity stock.


Question:
The available capital funds are to be carefully allocated among competing projects by careful prioritization. This is called ____________.

1.capital positioning.

2.capital structuring

3. capital rationing.

4.capital budgeting.


Question:
The cash management refers to management of ___.

1.A. cash only

2.cash and bank balances

3.cash and near-cash assets

4.fixed assets.


Question:
The company must implement the bonus issues decision within ____________ of the director approval.

1.6 months.

2.3 months.

3.2 months.

4.1 month.


Question:
The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called ____________.

1. working capital decision

2. an investment decision

3.a production decision.

4.a sales decision.


Question:
The expansion of CAPM is ____

1.Capital amount pricing model

2.Capital asset pricing model

3.Capital asset printing model.

4.a. Capital amount printing model.


Question:
The expansion of EAR is ____.

1. equivalent annual rate.

2.equivalent annuity rate

3. equally applied rate

4. equal advance rate


Question:
The first development financial institution in India that has got merged with a bank

1. IDBI

2.ICICI

3.UTI D

4.SFC


Question:
The fixed proportion of working capital should be generally financed from the ____ capital sources

1. fixed.

2.variable

3. semi-variable.

4.borrowed


Question:
The IDBI was established in

1.964

2.1965

3.1966

4.1967


Question:
The most appropriate dividend policy is the payment of ____________dividend per share consent

1.constant.

2.variable

3.higher

4.lower


Question:
The most difficult to calculate is ____________.

1.the cost of equity capital.

2. the cost of preferred capital.

3.the cost of retained earnings.

4.. the cost of equity and preference capital.


Question:
The policy concerning quarters of profit to be distributed as dividend is termed as ____________.

1.Profit policy.

2.Dividend policy

3.Credit policy.

4.Reserving policy.


Question:
The policy concerning quarters of profit to be distributed as dividend is termed as ____________.

1.Profit policy.

2.Dividend policy

3.Credit policy.

4.Reserving policy.


Question:
The primary goal of the financial management is ____

1.to maximize the return

2.to minimize the risk

3.to maximize the wealth of owners

4. to maximize profit..


Question:
The principal objective to form ICICI was:

1.To create a development financial institution

2.To create a financial institution for providing medium-term and long term project financing

3.Create a financial institution for providing medium-term and long term project financing to Indian businesses

4. All of the above areas


Question:
The principal objective was to create a development financial institution for providing ______project  financing to Indian businesses:

1.Medium Term

2.Long Term

3.Medium Term and Long Term

4.short term


Question:
The probability of bankrupt is higher ____________.

1. for a levered firm than an unlevered firm.

2.for a unlevered firm than an levered firm

3.only levered firm

4.only unlevered firm


Question:
The rate of return on investment ____ with the shortage of working capital

1.. falls.

2.going

3.constant

4.change


Question:
The required rate of return for an investment project should _____

1.leave the market price of the stock unchanged

2. increase the market price.

3. reduce the market price.

4.constant market price.


Question:
The type of lease that includes a third party, a lender, is called a(n)

1. sale and leaseback.

2.direct leasing arrangement.

3. leveraged lease.

4.operating lease.


Question:
The volume of sales is influenced by ____ of a firm

1. finance policy.

2. credit policy

3.profit policy

4. fund policy.


Question:
Traditional approach confines finance function only to ____________.

1.raising

2.mobilizing

3.utilizing

4.financing


Question:
Traditional theorists believe that.

1. there exists an optimal capital structure

2.no optimal capital structure

3.equal optimal capital structure

4.100% debt financial organizations


Question:
Variable cost per unit ____________.

1. varies with the level of output.

2.remains constant irrespective of the level of output.

3.changes with the growth of the firm.

4.does not change with the volume of production


Question:
Which of the following is/are assumption(s) underlying the Miller and Modigliani analysis?

1.Capital markets are perfect

2.Investors are assumed to be rational and behave accordingly

3.There is no corporate or personal income tax

4.All the above


Question:
Which one of the following is not a money market securities?

1.treasury bills

2.National savings certificate

3.Certificate of deposit

4.Commercial paper


Question:
Which one of the following is the main objective of Unit Trust of India?

1.To mobilize the savings of high-income groups.

2.To mobilize the savings to low and high-income groups.

3.To mobilize the savings of corporate.

4.To mobilize the savings of low and middle-income groups.


Question:
Working capital management is managing ____________.

1.short term assets and liabilities

2. long term assets

3. long terms liabilities

4.only short term assets


Question:
_________ dividend is the usual method of paying dividend .

1. Scrip.

2.Cash

3.Stock

4.Property


Question:
__________ are financial assets.

1.Bonds

2.Machines

3.Stocks

4.A and C


Question:
__________ dividend promises to pay shareholders at future date.

1.Scrip.

2.Cash

3.Stock

4.Property


More MCQS

  1. Business Studies-[Class 11-MCQ ]-Chapter 1- Nature and Purpose of Business
  2. Business Studies-[Class 11-MCQS ]-Chapter 2 Forms of Business Organisation
  3. Business Studies-[Class 11-MCQS ]-Chapter 3 Private, Public and Global Enterprises
  4. Business Studies-[Class 11-MCQS ]-Chapter 4 Business Services
  5. Business Studies-[Class 11-MCQS ]-Chapter 5 Emerging Modes of Business
  6. Business Studies-[Class 11-MCQS ]-Chapter 6 Social Responsibilities of Business
  7. Business Studies-[Class 11-MCQS ]-Chapter 7 Formation of a Company
  8. Business Studies-[Class 11-MCQS ]-Chapter 8 Sources of Business Finance
  9. Business Studies-[Class 11-MCQS ]-Chapter 9 Small Business
  10. Business Studies-[Class 11-MCQS ]-Chapter 10 Internal Trade
  11. Business Studies-[Class 11-MCQS ]-Chapter 11 International Business
  12. Business Studies-[Class 11-MCQS ]-Chapter 12 International Business
  13. Business Studies-[Class 12-MCQS ]-Chapter 1 Nature and Significance of Management
  14. Business Studies-[Class 12-MCQS ]-Chapter 2 Principles of Management
  15. Business Studies-[Class 12-MCQS ]-Chapter 3 Business Environment
  16. Business Studies-[Class 12-MCQS ]-Chapter 4 Planning
  17. Business Studies-[Class 12-MCQS ]-Chapter 5 Organising
  18. Business Studies-[Class 12-MCQS ]-Chapter 6 Staffing
  19. Business Studies-[Class 12-MCQS ]-Chapter 7 Directing
  20. Business Studies-[Class 12-MCQS ]-Chapter 9 Financial Management
  21. Business Studies-[Class 12-MCQS ]-Chapter 10 Financial Market
  22. Business Studies-[Class 12-MCQS ]-Chapter 11 Marketing
  23. Business Studies-[Class 12-MCQS ]-Chapter 12 Consumer Protection
  24. Financial Accounting MCQ Part – 2
  25. Financial Accounting MCQ Part – 3
  26. Business Economics MCQ Part 2
  27. Business Economics MCQ Questions and Answers Part – 3
  28. Corporate Finance MCQ Set 1
  29. Corporate Finance MCQ Set 2
  30. Direct Tax MCQ Set 2
  31. Business Information Systems MCQ Set 1
  32. Business Information Systems MCQ set 2
  33. Business Information Systems MCQ set 3
  34. Business Law MCQ Set 1
  35. Business Law MCQ Set 2
  36. Business Law Set 3
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