Financial Management MCQ Questions and Solutions with Explanations | Commerce

A. Safety

B. Flexibility

C. Control

D. Solvency

A. rise in share price

B. increase in physical asset of the firm

C. increase in net worth

D. growth in reserves

A. Traditional approach

B. Net operating income approach

C. Net income approach

D. MM approach

A. is only practical for institutional investors

B. increases the overall risk of a stock portfolio

C. always leads to higher returns than a domestic portfolio

D. can reduce risk due to increased diversification

A. There are no transaction costs

B. Securities are infinitely divisible

C. Investors have homogeneous expectations

D. All the firms pay tax on their income at the same rate

A. defensive industry

B. industry at a growth stage

C. industry in the maturity period

D. industry with more export potential

A. There are no corporate or personal income tax

B. Investors are assumed to be rational and behave accordingly

C. There is no corporate tax though there are personal income tax

D. Capital markets are perfect

A. Money supply

B. Per capita income

C. Unemployment rate

D. Manufacturing and Trade

A. The yield earned by investors has been, on average, in conformity with their expectations

B. The dividends will continue growing at a constant rate forever

C. The market price will continue growing at a constant rate forever

D. Both a and b

A. the company's financial performance

B. the past price of the scrip

C. the demand for the scrip

D. the past price and traded volumes