ExamVeda
Login
Home

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-6 section-8

Each section contains 100 MCQs on Financial Management .
51
Dollar return is divided by invested amount which is used for calculating the
Discuss
Answer & Solution
Answer: Option A
Solution:
Dollar return is divided by invested amount which is used for calculating the rate of return. A rate of return (RoR) is the net gain or loss on an investment over a specified time period, expressed as a percentage of the investment's initial cost. Gains on investments are defined as income received plus any capital gains realized on the sale of the investment.
52
An analysis of decision making of investors and managers is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
An analysis of decision making of investors and managers is classified as behavioral finance. Behavioral finance is the study of the influence of psychology on the behavior of investors or financial analysts. It also includes the subsequent effects on the markets.
53
Yield on bond is 7% and market required return is 14% then market risk premium would be
Discuss
Answer & Solution
Answer: Option D
Solution:
Market risk premium = Market required return - Yield on bond
= 14% - 7% = 7.00%
54
An expected rate of return is denoted by
Discuss
Answer & Solution
Answer: Option C
Solution:
An expected rate of return is denoted by r-hat. In securities trading, the letter R has a special meaning when added to the end of a ticker symbol. The letter R has a different meaning when applied as part of financial formula where it usually means some form of return.
55
In expected future returns, tighter probability distribution shows risk on given investment which is
Discuss
Answer & Solution
Answer: Option A
Solution:
In expected future returns, tighter probability distribution shows risk on given investment which is smaller. The return that is expected to be earned on an asset in the future.
56
An inflation free rate of return and inflation premium are two components of
Discuss
Answer & Solution
Answer: Option A
Solution:
An inflation free rate of return and inflation premium are two components of quoted rate. An inflation free rate of return and inflation premium are two components of quoted rate. A rate expressed on the basis which is conventional in the market in which the parties are dealing or proposing to deal.
57
Risk affects any firm with factors such as war, recessions, inflation and high interest rates is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Risk affects any firm with factors such as war, recessions, inflation and high interest rates is classified as market risk. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets in which he or she is involved.
58
Risk on a stock portfolio which cannot be eliminated or reduced by placing it in diversified portfolio is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Risk on a stock portfolio which cannot be eliminated or reduced by placing it in diversified portfolio is classified as market risk. Market risk is the possibility of an investor experiencing losses due to factors that affect the overall performance of the financial markets in which he or she is involved.
59
In investment returns, a received amount is subtracted from an invested amount which is used to calculate
Discuss
Answer & Solution
Answer: Option B
Solution:
In investment returns, a received amount is subtracted from an invested amount which is used to calculate dollar return. The dollar amount of the rate of return over a given period of time.
60
Past realized rate of return in period t is denoted by
Discuss
Answer & Solution
Answer: Option D
Solution:
Past realized rate of return in period t is denoted by r bar t. The letter R has a different meaning when applied as part of financial formula where it usually means some form of return.