Financial Management | Chapter 1 | Part 2 | MBA MCQs | FM

Finacial Management MCQs

  

 

1. Financial Management is mainly concerned with ____________.
   1.   arrangement of funds
   2.   all aspects of acquiring and utilizing financial resources for firms activities
   3.   efficient Management of every business.
   4.   profit maximization
2. In his traditional role the finance manager is responsible for ____________.
   1.   arrange of utilization of funds.
   2.   effective management of capital.
   3.   acquiring capital assets of the organization.
   4.   arrangement of financial resources.
3. 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..
4. Capital budgeting is related to ____________.
   1.   long terms assets.
   2.   short term assets.
   3.   long terms and short terms assets.
   4.   fixed assets
5. Working capital management is managing ____________.
   1.   long term assets.
   2.   only short term assets.
   3.   long terms liabilities
   4.   short term assets and liabilities
6. When few hold the shares of a public limited company it is called ____________.
   1.   Public and private company
   2.   Publicly traded company
   3.   Privately owned company
   4.   Closely held company
7. Future value interest factor takes ____________.
   1.   Compounding rate
   2.   Deflation rate.
   3.   Inflation rate.
   4.   Discounting rate
8. Present value takes ____________.
   1.   Compounding rate.
   2.   Discounting rate.
   3.   Inflation rate.
   4.   Deflation rate.
9. Financial decisions involve ____________.
   1.   Investment, financing and dividend decisions.
   2.   Investment sales decisions.
   3.   Financing cash decisions.
   4.   Investment dividend decisions
10. Traditional approach confines finance function only to ____________.
    1.   raising
    2.   mobilizing
    3.   utilizing
    4.   financing
11. The companys cost of capital is called ____________.
    1.   Leverage rate
    2.   Risk rate.
    3.   Return rate
    4.   Hurdle rate.
12. Market value of the shares are decided by ____________.
    1.   the respective companies.
       .
    2.   share holders.
    3.   the government
    4.   the investment market.
13. 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.
14. The expansion of CAPM is ________
    1.   Capital amount pricing model.
    2.   Capital asset printing model.
    3.   Capital amount printing model
    4.   Capital asset pricing model.
15. The companys average cost of capital is ____________.
    1.   the average cost of equity shares and debentures
    2.   the average cost of all sources of long-term funds
    3.   the average cost of short term funds..
    4.   the average cost of equity preference shares.
16. The cost of capital of a long term debt is generally ____________.
    1.   Lower than the owned funds
       .
    2.   Equal to that of owned funds.
    3.   Higher than that of owned funds.
    4.   More or less than owned funds.
17. Interest on debt capital provides a ____________ to the equity share holders.
    1.   added profit.
    2.   additional financial burden
    3.   dividend.
    4.   tax shield.
18. 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
19. The required rate of return for an investment project should ____________.
    1.   increase the market price.
    2.   reduce the market price.
    3.   leave the market price of the stock unchanged
    4.   constant market price
20. When a company uses debt fund in its financial structure, it will lead to a change in____________.
    1.   Stock market leverage
    2.   Operating leverage
    3.   Financial leverage.
    4.   Money market leverage.