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Financial Management MCQ Questions and Solutions with Explanations | Commerce

Financial Management 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. Financial Management 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-4 section-10

Each section contains 100 MCQs on Financial Management .
31
Corporations that buy financial instruments with money accepted from savers are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Corporations that buy financial instruments with money accepted from savers are classified as mutual funds. A mutual fund is a type of financial vehicle made up of a pool of money collected from many investors to invest in securities such as stocks, bonds, money market instruments, and other assets.
32
Corporate associations who have common bonds being employees of same firm are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Corporate associations who have common bonds being employees of same firm are classified as credit unions. A credit union is a type of financial cooperative that provides traditional banking services.
33
Set of rules made by corporation founders such as directors election procedure are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Set of rules made by corporation founders such as directors election procedure are classified as by laws. Corporate bylaws (sometimes spelled "by-laws") are the rules of a corporation, established by the board of directors during the process of starting a corporation. When a corporation is formed (a process called incorporation), one of the first tasks of the new corporation is to have corporate bylaws formed.
34
Risk of doing business in particular country and arises from foreign investments is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Risk of doing business in particular country and arises from foreign investments is classified as country risk. Country risk is the risk that a foreign government will default on its bonds or other financial commitments. Country risk also refers to the broader notion of the degree to which political and economic unrest affect the securities of issuers doing business in a particular country.
35
Markets which bring closer institutions needing funds and with surplus funds are classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Markets which bring closer institutions needing funds and with surplus funds are classified as financial markets. A financial market is a broad term describing any marketplace where trading of securities including equities, bonds, currencies, and derivatives occur.
36
Process of selling company stock at large to general public and get lending from banks is classified as an
Discuss
Answer & Solution
Answer: Option A
Solution:
Process of selling company stock at large to general public and get lending from banks is classified as an initial public offering. An initial public offering (IPO) refers to the process of offering shares of a private corporation to the public in a new stock issuance. Public share issuance allows a company to raise capital from public investors.
37
Partners who are only liable for their own part of investment are considered as
Discuss
Answer & Solution
Answer: Option C
Solution:
Partners who are only liable for their own part of investment are considered as corporate partners. Corporate Partnership is an exclusive academic-corporate partnership based on Corporate Partners contributing to the Alliance and its MIM programme and benefitting from privileged access to a global pool of top talent from the world’s leading business schools.
38
Sales revenue Rs 90,000, operating taxes Rs 30,000 and operating capital Rs 15,000 then value of free cash flows will be
Discuss
Answer & Solution
Answer: Option A
Solution:
Free cash flow = Sales revenue - Operating taxes - Operating capital
= Rs. 90000 - Rs. 30000 - Rs. 15000 = Rs. 45000.
39
Legal entity separation from its legal owners and managers with help of state laws is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Legal entity separation from its legal owners and managers with help of state laws is classified as Corporation. A corporation is a legal entity that is separate and distinct from its owners. Corporations enjoy most of the rights and responsibilities that individuals possess: they can enter contracts, loan and borrow money, sue and be sued, hire employees, own assets and pay taxes.
40
Cost of money is affected by factors which includes
Discuss
Answer & Solution
Answer: Option D
Solution:
Cost of money is affected by factors which includes inflation. The cost of money changes with variance in interest rates, and is used to gauge the opportunity costs involved in the potential investment of that money in securities or other assets.