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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-8 section-2

Each section contains 100 MCQs on Financial Management .
71
If a market is inefficient, as new information is received about a security____________.
Discuss
Answer & Solution
Answer: Option C
Solution:
If a market is inefficient, as new information is received about a security there will be a lag in the adjustment of the stock price.
72
The bonus issue is permitted to be made out of __________ and premium collected in cash.
Discuss
Answer & Solution
Answer: Option A
Solution:
The bonus issue is permitted to be made out of free reserves and premium collected in cash. A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders.
73
The bonus issue is made to make the nominal value and the __________ value of the shares of the company.
Discuss
Answer & Solution
Answer: Option B
Solution:
The bonus issue is made to make the nominal value and the Market value of the shares of the company. A bonus issue, also known as a scrip issue or a capitalization issue, is an offer of free additional shares to existing shareholders.
74
The highest level of market efficiency is_____________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The highest level of market efficiency is strong form efficiency. Market efficiency refers to the degree to which market prices reflect all available, relevant information.
75
Having defined working capital as current assets, it can be further classified according to __________.
Discuss
Answer & Solution
Answer: Option D
Solution:
Having defined working capital as current assets, it can be further classified according to components and time. Working capital is a financial metric which represents operating liquidity available to a business, organisation or other entity, including governmental entities.
76
The weak form of the EMH is supported if successive price changes over time are________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The weak form of the EMH is supported if successive price changes over time are independent of each other. The efficient-market hypothesis (EMH) is a theory in financial economics that states that asset prices fully reflect all available information.
77
Dividend policy of a firm affects both the long-time financing and __________ wealth.
Discuss
Answer & Solution
Answer: Option D
Solution:
Dividend policy of a firm affects both the long-time financing and Shareholders wealth. Dividend policy is the policy a company uses to structure its dividend payout to shareholders.
78
The random walk hypothesis is most related to the___________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The random walk hypothesis is most related to the weak-form EMH. Weak form efficiency, also known as the random walk theory, states that future securities' prices are random and not influenced by past events. Advocates of weak form efficiency believe all current information is reflected in stock prices and past information has no relationship with current market prices.
79
______________ is the distribution of the profits of a company among its shareholders.
Discuss
Answer & Solution
Answer: Option C
Solution:
Dividend is the distribution of the profits of a company among its shareholders. A dividend is the distribution of reward from a portion of the company's earnings and is paid to a class of its shareholders.
80
If an investor searches for patterns in security returns by examining various techniques applied to a set of data, this is known as__________.
Discuss
Answer & Solution
Answer: Option B
Solution:
If an investor searches for patterns in security returns by examining various techniques applied to a set of data, this is known as technical analysis. Technical analysis is a trading discipline employed to evaluate investments and identify trading opportunities by analyzing statistical trends gathered from trading activity, such as price movement and volume.