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-6

The foreign exchange market is referred to as a market where one country's currency is exchanged for another currency. The currency exchange is usually made through the following methods

A) buyers and sellers of foreign exchange meet at a physical location B) buyers and sellers of foreign exchange meet through a telephone network C) buyers and sellers of foreign exchange meet through computer communications D) Both B and C

Discuss

Answer & Solution

Answer: Option D

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

Which one of the following formulas used for calculating average rate of return?

A) Average income ÷ Average investments B) Average investments ÷ Average income C) Income ÷ Capital employed D) None of the above

Discuss

Answer & Solution

Answer: Option A

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

Financial leverage in a firm is positively affected by

A) Intensity of tangible assets B) Operating leverage C) Profitability D) Tax Rate

Discuss

Answer & Solution

Answer: Option A

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

The most common approach for analyzing the capital structure of a firm is

A) Ratio Analysis B) Cash Flow Analysis C) Comparative Analysis D) Leverage Analysis

Discuss

Answer & Solution

Answer: Option C

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

Which of the following period in yearsis called Classical Gold Standard?

A) 1875-1914 B) 1914-1944 C) 1944-1971 D) 1973-2008

Discuss

Answer & Solution

Answer: Option A

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

Examine the following statements and choose the correct answer:
Assertion (A): The American style option, compared to the European style, provides more freedom to option holders in exercising the option.
Reason (R): The American style option can be exercised only at a specified date which is generally the expiration date.

A) Both (A) and (R) are correct B) Both (A) and (R) are incorrect C) (A) is correct, but (R) is incorrect D) (A) is incorrect, but (R) is correct

Discuss

Answer & Solution

Answer: Option C

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

Match the following:

List-I	List-II
a. Certificate of deposits	1. 91 days, 182 days and 364 days
b. Debentures	2. 3 to 5 months
c. Treasury bills	3. 1 to 270 days
d. Commercial papers	4. Longer periods, i.e. n years

A) a-2, b-4, c-3, d-1 B) a-2, b-4, c-1, d-3 C) a-4, b-3, c-1, d-2 D) a-3, b-4, c-2, d-1

Discuss

Answer & Solution

Answer: Option B

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

The principal reason for the existence of leasing is that

A) intermediate term loans are difficult to obtain B) this is a type of financing unaffected by changes in tax law C) companies, financial institutions and individuals derive different benefits from owing assets D) leasing is a renewable source of intermediate term funds

Discuss

Answer & Solution

Answer: Option C

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

After tax cost of debt capital is calculated by

A) (1 + tax rate) × C_B (before tax) B) C_B (before tax) × (1 - tax rate) C) (1 - tax rate) × C_B (before tax) D) None of the above

Discuss

Answer & Solution

Answer: Option C

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

Internal source of finance do not include

A) ordinary shares B) better management of working capital C) retained earnings D) trade credit

Discuss

Answer & Solution

Answer: Option D

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