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-9 section-4

Which one of the following statements is false?

A) Effective dividend policy is an important tool to achievethe goal of wealth maximization B) According to Walter, the optimal payout ratio for a growth firm is 100% C) The MM Model asserts that the value of the firm is not affected whether the firm pays dividend or not D) The 'bird-in-the-hand theory' in reference to dividend decision has been developed by Myron Gordon

Discuss

Answer & Solution

Answer: Option B

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

Regarding securitisation, which of the following is not correct?

A) Derivatives are treated as on balance sheet items B) Granularity of securitised assets can mitigate the credit risk C) Credit enhancement' means credit quality is increased above from the originator's underlying asset pool D) Securitisation makes it possible to transfer risks from an entity that does not want to bear it, to one that does

Discuss

Answer & Solution

Answer: Option A

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

What is/are the effect(s) of speculation on exchange rate?

A) It aggravates the market trends B) It causes violent fluctuations in exchange rate C) Both A and B D) Neither A nor B

Discuss

Answer & Solution

Answer: Option C

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

Medium term loans are for a period of

A) three months B) one year C) three years D) five years

Discuss

Answer & Solution

Answer: Option D

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

Long-term loans are for a period of

A) one year B) five years C) more than five years D) None of these

Discuss

Answer & Solution

Answer: Option C

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

Interest paid (earned) on both the original principal borrowed (lent), and previous interest earned is often referred to as

A) Present value B) Simple interest C) Future value D) Compound interest

Discuss

Answer & Solution

Answer: Option D

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

Global Depository Receipts (GDRs) are issued by successful corporations with a view to attracting

A) overseas loan funds B) remittances from NRIs C) foreign equity capital D) foreign direct investment

Discuss

Answer & Solution

Answer: Option A

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

In multinational capital budgeting, the value of project is determined by

A) discounted cash flow B) net present value of future cash flow C) net present value of present cash outflow D) risk factor cash flow

Discuss

Answer & Solution

Answer: Option B

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

According to which of the following, the firm's market value is not affected by capital structure?

A) MM Hypothesis B) Net Income Approach C) The Traditional View D) None of the above

Discuss

Answer & Solution

Answer: Option A

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

Which type of lease is presumed, when the present value of minimum lease payments is approximately equal to the fair value of the lease assets?

A) Finance lease B) Operating lease C) Mixed lease D) All of the above

Discuss

Answer & Solution

Answer: Option A

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