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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-3

Each section contains 100 MCQs on Financial Management .
71
One of the statements given below provides evidence for the semi-strongly efficient form.
Discuss
Answer & Solution
Answer: Option C
Solution:
One of the statements given below provides evidence for the semi-strongly efficient form effect on the stock split.
72
A growth industry is defined as ____________.
Discuss
Answer & Solution
Answer: Option D
Solution:
A growth industry is defined as an industry with average growth higher than the growth of the economy. A growth industry is that sector of an economy which experiences a higher-than-average growth rate as compared to other sectors. Growth industries are often new or pioneer industries that did not exist in the past. Their growth is a result of demand for new products or services offered by companies in the field.
73
In BSE shares are divided into_______________.
Discuss
Answer & Solution
Answer: Option B
Solution:
In BSE shares are divided into three categories. Primarily the stocks that are listed in the National Stock Exchange are divided into three different categories on the basis of the market capitalization – large cap, mid cap and the small cap.
74
The value of bond depends on ____________.
Discuss
Answer & Solution
Answer: Option D
Solution:
The value of bond depends on the coupon rate, years to maturity and expected yield to maturity.
75
_________ is equal to (common shareholders' equity/common shares outstanding).
Discuss
Answer & Solution
Answer: Option A
Solution:
Book value per share is equal to (common shareholders' equity/common shares outstanding). The term "book value" is a company's assets minus its liabilities and is sometimes referred to as stockholder's equity, owner's equity, shareholder's equity, or simply equity.
76
Corner portfolio are calculated where a ___________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Corner portfolios are portfolios calculated where a security either enters or leave the portfolio.
77
The relationship between potential unsystematic risk and reward is given by ___________.
Discuss
Answer & Solution
Answer: Option A
Solution:
The relationship between potential unsystematic risk and reward is given by excess return to beta ratio. Beta Ratio refers to the efficiency in which a given filter element removes particles of a given size.
78
A technique uses in comparative analysis of financial statement is
Discuss
Answer & Solution
Answer: Option C
Solution:
A technique uses in comparative analysis of financial statement is common size analysis. Common size, or vertical analysis, is a method of evaluating financial information by expressing each item in a financial statement as a percentage of a base amount for the same time period. A company can use this analysis on its balance sheet or its income statement.
79
Net income available to stockholders is Rs 125 and total assets are Rs 1,096 then return on common equity would be
Discuss
Answer & Solution
Answer: Option B
Solution:

Net income available to stockholders = 125
Total assets = 1,096
Return on common equity rate shows the net income earned per every rupee invested.It acts as a yardstick of profitability.
Return on common equity
= (net income - preferential stock)/Average common stock holder's equity
No further information is available
= (125/1096)×100
= 11.4051 ℅
80
Price per share is Rs 30 and an earning per share is Rs 3.5 then price for earning ratio would be
Discuss
Answer & Solution
Answer: Option A
Solution:
Price for earning ratio = Price per share ÷ Earning per share
= Rs 30 ÷ Rs 3.5 = 8.57 times