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-1 section-5

Capital expenditure is one which is intended to benefits . . . . . . . . periods.

A) future B) past C) current D) None of these

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Answer & Solution

Answer: Option A

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Which of the following options illustrates the use of a hedging approach to financing assets?

A) Temporary current assets financed with long-term liabilities B) Permanent working capital financed with longterm liabilities C) Short-term assets financed with equity D) All assets financed with a mixture of 50% equity and 50% long-term debt

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Answer & Solution

Answer: Option B

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Which of the following can be termed as the components of total portfolio risk?

A) Equal to systematic risk plus non-diversifiable risk B) Equal to avoidable risk plus diversifiable risk C) Equal to systematic risk plus unavoidable risk D) Equal to systematic risk plus diversifiable risk

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Answer & Solution

Answer: Option D

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Under rigid dividend policy, the rate of dividend is . . . . . . . .

A) 0 B) -1 C) 1 D) 2

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Answer & Solution

Answer: Option A

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The payments over the lease term the lessee can or must make, is called

A) principal B) interest C) present value payments D) minimum lease payments

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Answer & Solution

Answer: Option D

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The lease where the lessee maintains and insures the leased asset rather than the lessor in a full-service lease is

A) A financial lease B) An operating lease C) A net lease D) None of the above

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Answer & Solution

Answer: Option C

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The primary goal of financial management is

A) To maximize the return B) To minimize the risk C) To maximize the wealth of owners D) To maximize profit

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Answer & Solution

Answer: Option C

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The dividend irrelevance theorem to share valuation was propounded by

A) James E. Walter B) Myron Gordon C) Modigliani and Miller D) None of the above

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Answer & Solution

Answer: Option C

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Underwriters of the security issues are required to

A) Purchase the securities underwritten B) Work as an agent of the company for marketing the securities C) Manage the issues of the securities D) Take up securities not subscribed by investors

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Answer & Solution

Answer: Option D

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Which of the following is/are, the source(s) of short-term finance?

A) Trade credit B) Bank credit C) Short-term borrowings D) All of these

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Answer & Solution

Answer: Option C

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