Financial management Archives - MCQ and Quiz for Exams

1. Which of the following is not an assumption in Miller and Modigliani approach?

There are no corporate or personal income tax

Investors are assumed to be rational and behave accordingly

There is no corporate tax though there are personal income tax

Capital markets are perfect

Detailed SolutionWhich of the following is not an assumption in Miller and Modigliani approach?

2. Stock in large companies and own by people who are not active in management is classified as

self-held stock

privately held stock

publicly held stock

enactive held stock

Detailed SolutionStock in large companies and own by people who are not active in management is classified as

3. The cash management refers to management of ___________.

cash only

cash and bank balances

cash and near cash assets

fixed assets

Detailed SolutionThe cash management refers to management of ___________.

4. Dividend changes are perceived important than the absolute level of dividends because.

management change dividends to protect their seats

dividend changes are thought to signal future expectations

MM state that absolute level of dividends is irrelevant

changes determine the level of borrowing

Detailed SolutionDividend changes are perceived important than the absolute level of dividends because.

5. If cash discount is offered to customers, then which of the following would increase?

Sales

Debtors

Debt collection period

All of the above

Detailed SolutionIf cash discount is offered to customers, then which of the following would increase?

6. Price per share divided by earnings per share is formula for calculating

price earning ratio

earning price ratio

pricing ratio

earning ratio

Detailed SolutionPrice per share divided by earnings per share is formula for calculating

7. Financial corporations which serve individual savers and commercial mortgage borrowers are classified as

savings associations

loans associations

preferred and common associations

savings and loans associations

Detailed SolutionFinancial corporations which serve individual savers and commercial mortgage borrowers are classified as

8. When two portfolios have identical values and payoffs then it is classified as

binomial parity relationship

put parity relationship

put option parity relationship

put call parity relationship

Detailed SolutionWhen two portfolios have identical values and payoffs then it is classified as

9. A schedule which shows interest constitutes reduced principal and unpaid balance is considered as

repaid schedule

depreciated schedule

amortization schedule

appreciated schedule

Detailed SolutionA schedule which shows interest constitutes reduced principal and unpaid balance is considered as

10. A risk associated with project and way considered by well diversified stockholder is classified as

expected risk

beta risk

industry risk

returning risk

Detailed SolutionA risk associated with project and way considered by well diversified stockholder is classified as

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