Top 550+ Solved Financial Management MCQ Questions Answer
Q. Floating capital means
a. Liquid capital
b. Permanent working capital
c. Redundant working capital
d. Gross working capital
Q. According to ------------- approach, cash inflow from assets should match with the cash outflow required to acquire them.
a. Aggressive approach
b. Hedging approach
c. Conservative approach
d. Optimization
Q. The appropriate objective of an enterprise is :
a. Maximization of sales
b. Maximization of owners wealth
c. Maximization of profits
d. None of these
Q. The job of finance manager is confined to:
a. Raising of funds
b. Management of cash
c. Raising of funds and their effective utilization
d. None of the above
Q. Financial decision involve
a. Investment, financing and dividend decisions
b. Investment, financing and sales decisions
c. Financing, dividend and cash decisions
d. None of the above
Q. The possibility that a company will have lower than anticipated profits is called ---------------------
a. Financial risk
b. Operational risk
c. Business risk
d. Technological risk
Q. -------------------- refers to the risk associated with the capital structure composition
a. Financial risk
b. Operational risk
c. Business risk
d. Technological risk
Q. When contribution is dividend with EBIT we get
a. Operating leverage
b. Financial leverage.
c. P/V ratio
d. EPS
Q. According to ------------------ the degree of leverage is irrelevant in determining the value of a firm
a. MM theory
b. Walter’s model
c. Baumol’s model
d. None of these
Q. --------------- leverage is obtained from the equation EBIT/EBT
a. Operating leverage
b. Financial leverage
c. Combined leverage
d. None of these
Q. Buying a security from low priced market and selling at high priced market is called -------------
a. Speculation
b. Arbitrage
c. Gangbling
d. Investment
Q. The traditional approach of capital structure was propounded by -------------------
a. David Durand
b. Solomon Ezra
c. Modigilani-Mille
d. None of these
Q. Net operating income(NOI) approach was propounded by ------------
a. Solomon Ezra
b. David Durand
c. Modigilani-Miller
d. None of these
Q. According to NOI theory, the value of the firm depends on -----------
a. Financial risk
b. Operational risk
c. Technological risk
d. Business risk
Q. --------------- theory is applicable only when the dividend pay out ratio is 100%
a. MM theory
b. NOI theory
c. Net income approach
d. None of these