Financial Management MCQ Questions and Solutions with Explanations

Section 1 Section 2 Section 3 Section 4 Section 5 Section 6 Section 7 Section 8 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 Section 15

1.
Degree of total leverage can be applied in measuring change in _________.

A. EBIT to a percentage change in quantity

B. EPS to a percentage change in EBIT

C. EPS to a percentage change in quantity

D. Quantity to a percentage change in EBIT

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2.
Investors can normally afford to assume larger risks in the ____ phase of the life- cycle.

A. accumulation

B. consolidation

C. spending

D. gifting

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3.
The measure of business risk is __________.

A. operating leverage

B. financial leverage

C. total leverage

D. working capital leverage

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4.
__________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.

A. Hedging

B. Market timing

C. Performance measurement

D. Asset allocation

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5.
The value of EBIT at which EPS is equal to zero is known as ____________.

A. Break-even point

B. Financial break-even point

C. Operating break-even point

D. Overall break-even point

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Financial Management MCQ Questions and Solutions with Explanations | Commerce

1. Degree of total leverage can be applied in measuring change in _________.

Answer & Solution

2. Investors can normally afford to assume larger risks in the ____ phase of the life- cycle.

Answer & Solution

3. The measure of business risk is __________.

Answer & Solution

4. __________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.

Answer & Solution

5. The value of EBIT at which EPS is equal to zero is known as ____________.

Answer & Solution

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1.
Degree of total leverage can be applied in measuring change in _________.

2.
Investors can normally afford to assume larger risks in the ____ phase of the life- cycle.

3.
The measure of business risk is __________.

4.
__________ is the most important investment decision because it determines the risk-return characteristics of the portfolio.

5.
The value of EBIT at which EPS is equal to zero is known as ____________.