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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.

Each section contains 100 MCQs on Financial Management .
1
Investment is the _______________.
Discuss
Answer & Solution
Answer: Option C
Solution:
Investment is the employment of funds on assets to earn returns. An investment is a monetary asset purchased with the idea that the asset will provide income in the future or will later be sold at a higher price for a profit.
2
Financial Management is mainly concerned with ______________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Financial Management is mainly concerned with all aspects of acquiring and utilizing financial resources for firms activities. Financial Management is the application of general principles of management to the financial possessions of an enterprise.
3
The primary goal of the financial management is ____________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The primary goal of the financial management is to maximize the wealth of owners. All businesses aim to maximize their profits, minimize their expenses and maximize their market share.
4
In his traditional role the finance manager is responsible for ___________.
Discuss
Answer & Solution
Answer: Option B
Solution:
In his traditional role the finance manager is responsible for arrangement of financial resources. Financial managers are responsible for the financial health of an organization. They produce financial reports, direct investment activities, and develop strategies and plans for the long-term financial goals of their organization.
5
Market value of the shares are decided by ____________.
Discuss
Answer & Solution
Answer: Option B
Solution:
Market value of the shares are decided by the investment market. Market value is the price an asset would fetch in the marketplace.
6
Which one of the following is not a money market securities?
Discuss
Answer & Solution
Answer: Option B
Solution:
National savings certificate is not a money market securities. The National Savings Certificate is a fixed income investment scheme that you can open with any post office.
7
Capital budgeting is related to ________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Capital budgeting is related to long terms assets. Capital budgeting is the process a business undertakes to evaluate potential major projects or investments.
8
The expansion of CAPM is ____________.
Discuss
Answer & Solution
Answer: Option B
Solution:
The expansion of CAPM is Capital asset pricing model. The capital asset pricing model (CAPM) is used to calculate the required rate of return for any risky asset.
9
Working capital management is managing ____________.
Discuss
Answer & Solution
Answer: Option A
Solution:
Working capital management is managing short term assets and liabilities. The goal of working capital management is to ensure that a company can afford its day-to-day operating expenses while, at the same time, investing the company's assets in the most productive way.
10
The company’s average cost of capital is ____________.
Discuss
Answer & Solution
Answer: Option C
Solution:
The company’s average cost of capital is the average cost of shares and all sources of long-term funds. A long-term investment is an account on the asset side of a company's balance sheet that represents the company's investments, including stocks, bonds, real estate and cash. Long-term investments are assets that a company intends to hold for more than a year.