Business Finance MCQ Questions and Solutions with Explanations

Business Finance MCQ Questions and Solutions with Explanations | Commerce

Business Finance MCQ Questions and answers with easy and logical explanations. Commerce provides you all type of quantitative and competitive aptitude mcq questions with easy and logical explanations. Business Finance MCQ is important for exams like B.COM, M.COM, BBA, BBM, CA, CS, CMA, CPA, CFA, UPSC, NET, Banking and other commerce department exam. Page-10 section-3

The segments of international financial market include
1. Foreign Exchange Market
2. International Arbitrage Market
3. International Money Market
4. International Bond Market
Select the correct answer by using the options given below

A) Both 1 and 4 B) 1, 3 and 4 C) 2, 3 and 4 D) All of the above

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Answer & Solution

Answer: Option D

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The instrument chosen for enhancement of international liquidity is

A) Society for Worldwide Inter-bank Financial Telecommunications (SWIFT) B) Special Drawing Rights (SDRs) C) Multilateral Netting D) Netting of Payments

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Answer & Solution

Answer: Option B

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Which of the following are rules to use when choosing between forward contracts and currency options?

A) When the quantity of a foreign-currency cash outflow is known, buy the currency forward B) When the quantity of a foreign currency cash outflow is unknown, buy the currency forward C) When the quantity of a foreign currency cash flow is partially known and partially uncertain, use a forward contract to hedge the known and unknown portions D) when the quantity of a foreign currency cash inflow is known, buy the currency forward

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Answer & Solution

Answer: Option A

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The overall capitalization rate and the cost of debt remain constant for all degrees of financial leverage. It is advocated by

A) Traditional Approach B) Net Income Approach C) Net Operating Income Approach D) M-M Approach

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Answer & Solution

Answer: Option C

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In which of the following ways should the discount rate be adjusted to increase a given future value?

A) Upward B) Downward C) First upward and then downward D) We should use PVIF to get the answer

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Answer & Solution

Answer: Option A

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Net present value is equal to

A) Total present value of cash inflow - Total present value of cash outflows B) Total present value of cash outflow - Total present value of cash inflows C) Total present value of cash outflows + Inflows D) None of the above

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Answer & Solution

Answer: Option A

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For contingency exposure of foreign exchange, the best derivative that can be used to hedge is

A) forwards B) options C) futures D) swaps

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Answer & Solution

Answer: Option C

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The cost of issuing new stock is called

A) the cost of equity B) marginal cost of capital C) floatation cost D) None of these

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Answer & Solution

Answer: Option C

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The date of settlement for a foreign exchange transaction is referred to as

A) Value date B) Clearing date C) Maturity date D) Transaction date

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Answer & Solution

Answer: Option A

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100

Securitisation is a process in which assets are sold to a bankruptcy remote . . . . . . . . in return for an immediate cash payment.

A) special purpose vehicle B) asset reconstruction corporation C) bank or NBFC D) mortgage company

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Answer & Solution

Answer: Option A

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