Finance Basics MCQs

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MCQs 1-10

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1. In finance, we refer to the market where new securities are bought and sold for the first time?

(a) Money market

(b) Capital market

(d) Secondary market

Correct! Wrong!

2. Which one of the following can issue the corporate bond?

(a) Individuals

(b) Government

(d) All of before

Correct! Wrong!

3. Which is the treasurer’s responsibility for managing the firm’s cash and marketable securities?

(a) Planning its capital structure

(b) Overseeing the corporate pension fund

(d) All of the above

Correct! Wrong!

4. Which of the following is the activity which finance people are involved?

(a) Investing decisions

(b) Marketing decisions

(d) Non of Above

Correct! Wrong!

5. What should be the long term focal point of financial management in a firm?

(a) The number and types of products or services provided by the firm

(b) The creation of value for shareholders

(d) The profits earned by the firm

Correct! Wrong!

6. Financing decision determines?

(a) Current asset

(b) Fix asset

(d) Mix of finance

Correct! Wrong!

7. Profit maximization is a?

(a) Long term concept

(b) Short term concept

(d) None

Correct! Wrong!

8. What are the three interrelated areas of finance?

(a) Financial markets, option and forwards

(b) Banking, financial institutions and swap currency

(d) All of above

Correct! Wrong!

9. Which of the following is not normally a responsibility of the controller of the modern corporation?

(a) Budgets and forecasts

(b) Asset management

(d) Cost accounting

Correct! Wrong!

10. Financial decisions are concerned with which of the following?

(a) Making investment decisions that optimize economic value

(b) Making asset management decisions that optimize economic wealth

(d) All of the above

Correct! Wrong!

Finance Basics MCQs (1-10)

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MCQs 11-20

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11. The goal of fundamental analysts is to find securities?

(a) Whose intrinsic value exceeds market price

(b) With a positive present value of growth opportunities

(d) All of the above

Correct! Wrong!

12. The combination of two or more firm, the resulting firm maintains the identity of one of the firm usually the larger?

(a) Joint venture

(b) Partnership

(d) Consolidation

Correct! Wrong!

13. If an investor were to sell 100 shares of Microsoft stock to another investor in the securities market, this would be referred to as what type of transaction?

(a) It is primary market transaction

(b) A secondary market transaction

(d) A futures market transaction

Correct! Wrong!

14. A Financial institution that underwrites new securities for resale?

(a) Financial intermediaries

(b) Mortgage Banker

(d) None

Correct! Wrong!

15. Which of the following statements always apply to corporations?

(a) Limited life

(b) Limited liability

(d) None

Correct! Wrong!

16. The purpose of financial markets is to?

(a) Increase the price of common stocks

(b) Lower the yield on bonds

(d) Control inflation

Correct! Wrong!

17. Which of the following is a depository financial institution?

(a) A savings bank

(b) An investment bank

(d) A pension fund

Correct! Wrong!

18. Among the pairs given below select a (n) example of a principal and a (n) example of an agent respectively?

(a) Shareholder; manager

(b) Manager; owner

(d) Shareholder; bondholder

Correct! Wrong!

19. What is potentially the biggest advantage of a small partnership over a sole proprietorship?

(a) Unlimited liability

(b) Single tax filing

(d) Raising capital

Correct! Wrong!

20. Which of the following statements is most correct?

(a) One of the way in which firm can mitigate or reduce agency problems between bondholders and stockholders is by increasing the amount of debt in the capital structure

(b) Managerial compensation can be structured to reduce agency problems between stockholders & managers

(d) All of the statements above are correct

Correct! Wrong!

Finance Basics MCQs (11-20)

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Future Value of a Single Amount MCQs

Future Value of a Single Amount Problems

Present Value of a Single Amount

Present Value of a Single Amount MCQs

Present Value of a Single Amount Problems

References

Financial Management: Theory and Practice, Dr Eugene F Brigham & C Micheal Ehrhardt

Fundamentals of Financial Management: Concise Edition, Brigham Houston

The Economist Guide to Financial Management, John Tennet

Financial Management: Core Concepts, Raymond M Brooks

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Finance Basics MCQs

MCQs 1-10

Click The Option and See Result

1. In finance, we refer to the market where new securities are bought and sold for the first time?

2. Which one of the following can issue the corporate bond?

3. Which is the treasurer’s responsibility for managing the firm’s cash and marketable securities?

4. Which of the following is the activity which finance people are involved?

5. What should be the long term focal point of financial management in a firm?

6. Financing decision determines?

7. Profit maximization is a?

8. What are the three interrelated areas of finance?

9. Which of the following is not normally a responsibility of the controller of the modern corporation?

10. Financial decisions are concerned with which of the following?

MCQs 11-20

Click The Option and See Result

11. The goal of fundamental analysts is to find securities?

12. The combination of two or more firm, the resulting firm maintains the identity of one of the firm usually the larger?

13. If an investor were to sell 100 shares of Microsoft stock to another investor in the securities market, this would be referred to as what type of transaction?

14. A Financial institution that underwrites new securities for resale?

15. Which of the following statements always apply to corporations?

16. The purpose of financial markets is to?

17. Which of the following is a depository financial institution?

18. Among the pairs given below select a (n) example of a principal and a (n) example of an agent respectively?

19. What is potentially the biggest advantage of a small partnership over a sole proprietorship?

20. Which of the following statements is most correct?

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