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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-5 section-3

Each section contains 100 MCQs on Financial Management .
41
Unsystematic risk is______.
Discuss
Answer & Solution
Answer: Option B
Solution:
Unsystematic risk is reduced through diversification. Unsystematic risk is the risk that is inherent in a specific company or industry. By investing in a range of companies and industries, unsystematic risk can be drastically reduced through diversification.
42
The method of raising equity capital from existing members by offering securities on pro rata basis is referred to as __________.
Discuss
Answer & Solution
Answer: Option B
Solution:
The method of raising equity capital from existing members by offering securities on pro rata basis is referred to as Right Issue. A rights issue is an invitation to existing shareholders to purchase additional new shares in the company.
43
The expected return on an investment in stock is___________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The expected return on an investment in stock is the sum of expected dividends and capital gains. The expected return on an investment is the expected value of the probability distribution of possible returns it can provide to investors.
44
Which of the following is not a source of long-term finance?
Discuss
Answer & Solution
Answer: Option C
Solution:
Commercial papers is not a source of long-term finance. Commercial paper is an unsecured, short-term debt instrument issued by a corporation, typically for the financing of accounts payable and inventories and meeting short-term liabilities.
45
If the dispersion around a security's return is larger ____________.
Discuss
Answer & Solution
Answer: Option D
Solution:
If the dispersion around a security's return is larger the security's risk is higher. A security risk assessment identifies, assesses, and implements key security controls in applications.
46
EBIT means _____________.
Discuss
Answer & Solution
Answer: Option D
Solution:
EBIT means Operating Income, Operating Profit and Earnings before interest and tax. It is a calculation commonly used to measure the profitability of a company.
47
Another name for stock brokers is______________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Another name for stock brokers is registered representatives. A stockbroker is a professional who executes buy and sell orders for stocks and other securities on behalf of clients.
48
Which of the following factors influence(s) the capital structure of a business entity?
Discuss
Answer & Solution
Answer: Option C
Solution:
Technology adopted factors influence the capital structure of a business entity. The capital structure is how a firm finances its overall operations and growth by using different sources of funds.
49
Investment professionals whose jobs may depend on their performance relative to the market are the______________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Investment professionals whose jobs may depend on their performance relative to the market are the registered representatives. There are many types of investment professionals including brokers, investment advisers and financial planners.
50
Which of the following ratios is not affected by the financial structure and the tax rate of a company?
Discuss
Answer & Solution
Answer: Option C
Solution:
Earnings per share ratios is not affected by the financial structure and the tax rate of a company. It is calculated by dividing the company's net income with its total number of outstanding shares. It is a tool that market participants use frequently to gauge the profitability of a company before buying its shares.