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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-2

Each section contains 100 MCQs on Financial Management .
61
Book value is_______________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Book value is the accounting value of the firm as reflected in the financial statements. Book value is also the net asset value of a company calculated as total assets minus intangible assets (patents, goodwill) and liabilities.
62
To whom does the Treasurer most likely report?
Discuss
Answer & Solution
Answer: Option A
Solution:
To Chief Financial Officer, the Treasurer most likely report. The chief financial officer (CFO) is the officer of a company that has primary responsibility for managing the company's finances, including financial planning, management of financial risks, record-keeping, and financial reporting.
63
The price to book value ratio tends to be close for_____________.
Discuss
Answer & Solution
Answer: Option B
Solution:
The price to book value ratio tends to be close for banks. Price-to-book value (P/B) is the ratio of market value of a company's shares (share price) over its book value of equity. The book value of equity, in turn, is the value of a company's assets expressed on the balance sheet.
64
The return after the pay off period is not considered in case of __________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The return after the pay off period is not considered in case of Payback period method. Payback period is the time in which the initial outlay of an investment is expected to be recovered through the cash inflows generated by the investment. It is one of the simplest investment appraisal techniques.
65
___________ shifts the weights of securities in the portfolio to take advantage of areas that is expected to do relatively better than other areas.
Discuss
Answer & Solution
Answer: Option D
Solution:
Sector rotation shifts the weights of securities in the portfolio to take advantage of areas that is expected to do relatively better than other areas. Sector rotation is a theory of stock market trading patterns. In this context, a sector is understood to mean a group of stocks representing companies in similar lines of business.
66
Depreciation is include in costs in case of __________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Depreciation is include in costs in case of Accounting rate. Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life and is used to account for declines in value. Businesses depreciate long-term assets for both tax and accounting purposes.
67
The central issue of efficient markets concerns______________.
Discuss
Answer & Solution
Answer: Option B
Solution:
The central issue of efficient markets concerns information.
68
What is the most appropriate goal of the firm?
Discuss
Answer & Solution
Answer: Option A
Solution:
Shareholder wealth maximization is the most appropriate goal of the firm. Wealth maximization is the concept of increasing the value of a business in order to increase the value of the shares held by stockholders.
69
A bond issue is broken up so that some investors will receive only interest payments while others will receive only principal payments, which is an example of ________.
Discuss
Answer & Solution
Answer: Option E
Solution:
A bond issue is broken up so that some investors will receive only interest payments while others will receive only principal payments, which is an example of un-bundling and financial engineering.
70
__________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind.
Discuss
Answer & Solution
Answer: Option A
Solution:
Financial management is concerned with the acquisition, financing, and management of assets with some overall goal in mind. Financial Management is the application of general principles of management to the financial possessions of an enterprise.