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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-7 section-10

Each section contains 100 MCQs on Financial Management .
61
Type of partnership in which liabilities are limited for business owners is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Type of partnership in which liabilities are limited for business owners is classified as limited partnership. A limited partnership (LP) not to be confused with a limited liability partnership exists when two or more partners unite to conduct a business in which one or more of the partners is liable only up to the amount of their investment.
62
Financial security issued by banks operating outside U.S is classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Financial security issued by banks operating outside U.S is classified as Eurodollar market deposits. Eurodollars are time deposits denominated in U.S. dollars at banks outside the United States, and thus are not under the jurisdiction of the Federal Reserve.
63
Value of free cash flows Rs55000, operating cost and taxes Rs30000, then value of sales revenues (in Rs) will be
Discuss
Answer & Solution
Answer: Option B
Solution:
Value of sales revenues = Value of free cash flows + Operating cost and taxes
= Rs. 55000 + Rs. 30000 = Rs. 85000.00
64
Markets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as
Discuss
Answer & Solution
Answer: Option B
Solution:
Markets which deal with buying and selling of bonds, mortgages, notes and stocks are considered as financial asset markets. A financial asset's worth may be based on an underlying tangible or real asset, but market supply and demand influence its value as well.
65
Capital gain expected by stockholders and dividends are included in
Discuss
Answer & Solution
Answer: Option D
Solution:
Capital gain expected by stockholders and dividends are included in cost of equity. The cost of equity is the return a company requires to decide if an investment meets capital return requirements.
66
Markets where assets are bought or sold within a few days or at some future dates are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Markets where assets are bought or sold within a few days or at some future dates are classified as spot markets and future markets. The spot market is where financial instruments, such as commodities, currencies and securities, are traded for immediate delivery. Delivery is the exchange of cash for the financial instrument. A futures contract, on the other hand, is based on the delivery of the underlying asset at a future date.
67
Default free financial security sells by U.S treasury is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Default free financial security sells by U.S treasury is classified as U.S treasury bills. A Treasury Bill (T-Bill) is a short-term debt obligation backed by the U.S. Treasury Department with a maturity of one year or less.
68
Relevant information about stock market price if it is given, then this price is called
Discuss
Answer & Solution
Answer: Option B
Solution:
Relevant information about stock market price if it is given, then this price is called intrinsic price. Intrinsic value is the perceived or calculated value of an asset, an investment, or a company. The term finds use in fundamental analysis to estimate the value of a company and its cash flows. Another use of intrinsic value is in the amount of profit that exists in an options contract.
69
Reduced consumer demand for loans, homes and new automobiles is result of
Discuss
Answer & Solution
Answer: Option A
Solution:
Reduced consumer demand for loans, homes and new automobiles is result of less disposable income. Disposable income, also known as disposable personal income (DPI), is the amount of money that households have available for spending and saving after income taxes have been accounted for.
70
Formula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate
Discuss
Answer & Solution
Answer: Option C
Solution:
Formula Sales revenue minus operating cost and taxes minus operating capital investments is used to calculate free cash flows. Free cash flow is the cash a company produces through its operations, less the cost of expenditures on assets.