Business Finance MCQ Questions and Solutions with Explanations

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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-4

Each section contains 100 MCQs on Business Finance .

The true cost of hedging transaction exposure by using forward market is

A) difference between agreed rate and spot rate at the time of entering into contract B) difference between agreed rate and spot rate on the due date of contract C) forward premium D) discount annualised

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Which of the following is a nonrecurring dividend paid to shareholders in addition to the regular dividend?

A) Stock split B) Stock dividend C) Extra dividend D) Regular dividend

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

A view that the dividend policy of a firm has a bearing on share valuation advocated byJames E. Walter, is based on which one of the following assumptions?

A) Retained earnings are the only source of financing B) The cost of capital does not remain constant C) The return on investment fluctuates D) All of the above

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

Debentures represent

A) fixed capital of the company B) permanent capital of the company C) fluctuating capital of the company D) loan capital of the company

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

The exchange rate is

A) the price of one currency relative to gold B) the value of a currency relative to inflation C) the change in the value of money over time D) the price of one currency relative to another

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

Mutually exclusive projects can be more accurately ranked as per

A) Internal Rate of Return Method B) Net Present Value Method C) Modified Internal Rate of Returns Method D) Accounting or Average Rate of Return Method

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

The Capital Asset Pricing Model (CAPM) establishes the relationship between

A) Risk and EPS B) Risk and value of the firm C) Risk and the required rate of return D) None of the above

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

Which of the following statement is/are incorrect?

A) Sometimes, IRR fails to indicate correct choice between mutually exclusive projects B) Payback period is widely used since it is a measure of profitability C) Both A and B D) None of the above

Discuss

Answer & Solution

Answer: Option B

No explanation is given for this question. Let's Discuss on Board

Which of the following does not constitute a standalone risk analysis?

A) Simulation Analysis B) Break-even Analysis C) Corporate Risk Analysis D) Scenario Analysis

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

100

Which of the following formulae is related to operating leverage?

A) $$\frac{{{\text{Contribution}}}}{{{\text{Operating Profit}}}}$$ B) $$\frac{{{\text{Sales }} - {\text{ Variable cost}}}}{{{\text{Earning before interest and tax}}}}$$ C) $$\frac{{{\text{Percentage change in EBIT}}}}{{{\text{Percentage change in sales}}}}$$ D) All of the above

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

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Business Finance MCQ Questions and Solutions with Explanations | Commerce