Financial Management MCQ Questions and Solutions with Explanations | Commerce

Corporations such as Citigroup, American Express and Fidelity are classified as financial services corporations. Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.

Financial corporations which serve individual savers and commercial mortgage borrowers are classified as savings and loans associations. Financial services are the economic services provided by the finance industry, which encompasses a broad range of businesses that manage money, including credit unions, banks, credit-card companies, insurance companies, accountancy companies, consumer-finance companies, stock brokerages, investment funds, individual managers and some government-sponsored enterprises.

A regulatory body which licenses brokers and oversees traders is classified as national association of securities dealers. A regulatory body is like a professional body but it is not a membership organisation and its primary activity is to protect the public.

Companies take savings as premium, invest in bonds and make payments to beneficiaries are classified as life insurance companies.

Federal government tax revenues if it exceeds government spending then it is classified as budget surplus. A budget surplus is a period when income or receipts exceed outlays or expenditures. A budget surplus often refers to the financial states of governments; individuals prefer to use the term 'savings' instead of the term 'budget surplus.'

Mutual fund allows investors to sale out their share during any normal trading hours is classified as exchange traded fund. Exchange Traded Funds (ETFs) are mutual funds listed and traded on stock exchanges like shares. Index ETFs are created by institutional investors swapping shares in an index basket, for units in the fund.

Step in initial public offering in which hired agents act on behalf of owners is classified as agency problems. The agency problem is a conflict of interest inherent in any relationship where one party is expected to act in another's best interests. In corporate finance, the agency problem usually refers to a conflict of interest between a company's management and the company's stockholders.

Financial security which is tax exempted and issues by state governments to individuals is classified as municipal bonds. Municipal bonds are loans investors make to local governments. They are issued by cities, states, counties, or other local governments. For that reason, the interest they pay on the bonds is tax-free.

A company sells its stock shares for raising more equity capital is classified as seasoned equity offering. A seasoned issue is an issue of additional securities from an established company whose securities already trade in the secondary market. A seasoned issue is also known as a "seasoned equity offering" or "follow-on offering." New shares issued by blue-chip companies are considered seasoned issues.

All partners have limited liability in limited liability partnership. LLP is an alternative corporate business form that gives the benefits of limited liability of a company and the flexibility of a partnership.