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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-1 section-11

Each section contains 100 MCQs on Financial Management .
1
Loans by finance companies, banks and credit unions is classified as
Discuss
Answer & Solution
Answer: Option A
Solution:
Loans by finance companies, banks and credit unions is classified as consumer credit loans. Consumer credit is personal debt taken on to purchase goods and services. A credit card is one form of consumer credit.
2
Bonds issue by corporations which are more risky than preferred stocks are classified as
Discuss
Answer & Solution
Answer: Option C
Solution:
Common stock is a form of corporate equity ownership, a type of security.
3
Federal Reserve policy and federal surplus or deficit of budget affect the
Discuss
Answer & Solution
Answer: Option B
Solution:
Federal Reserve policy and federal surplus or deficit of budget affect the cost of money. The Federal Reserve System is the central banking system of the United States of America. The Federal Open Market Committee (FOMC) sets monetary policy.
4
Market where market makers keep record of stock of financial instruments is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Market where market makers keep record of stock of financial instruments is classified as dealer market. A dealer market is a financial market mechanism wherein multiple dealers post prices at which they will buy or sell a specific security of instrument.
5
An unlimited liability for business debts and less capital for growth are limitations of
Discuss
Answer & Solution
Answer: Option A
Solution:
An unlimited liability for business debts and less capital for growth are limitations of proprietorship. Since the owner takes all the profits, he must also accept full personal responsibility for all the losses, even to the extent of his personal possessions.
6
Transfer through institutions such as mutual funds or banks are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Transfer through institutions such as mutual funds or banks are classified as financial intermediary. A financial intermediary is an entity that acts as the middleman between two parties in a financial transaction, such as a commercial bank, investment banks, mutual funds and pension funds.
7
Money lends to corporations by banks is classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Money lends to corporations by banks is classified as commercial loans. A commercial loan is a debt-based funding arrangement between a business and a financial institution such as a bank.
8
Markets in which outstanding securities are traded by investors are classified as
Discuss
Answer & Solution
Answer: Option B
Solution:
Markets in which outstanding securities are traded by investors are classified as secondary markets. The secondary market is where investors buy and sell securities they already own. It is what most people typically think of as the "stock market," though stocks are also sold on the primary market when they are first issued.
9
In order to find out cost of equity capital under CAPM, which of the following is not required?
Discuss
Answer & Solution
Answer: Option C
No explanation is given for this question. Let's Discuss on Board
10
Shares of face value of Rs. 10 are 80% paid up. The company declares a dividend of 50%. Amount of dividend per share is:
Discuss
Answer & Solution
Answer: Option B
No explanation is given for this question. Let's Discuss on Board