_question bank of financial management_1mark

8/14/2019 _Question Bank of Financial Management_1mark

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Financial Management

Unit1 - 1 Mark Quiz Questions

1.Cost has two dimenstions namely ______

a. Explicit

b. Implicit

c. None

d. Both A and C

2.Debt is cheap bacause of

a. Taxable outcome

b. Taxable liability

c. None

d. Taxable income

3.Determination of proportion in financing decision are____

a. Equity

b. None

c. Debt

d. Both A and B

4.Dividend decision is based on.

a. Dividend equity

b. Dividend policy

c. None

d. Dividend paucity


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5.Dividend decision is made by

a. Budgeting manager

b. Finance manager

c. Budgelted manager

d. Budget manager

6.Dividend pay-out ratio means portion of

Hi agjrthtyhowtrhty

a. None

b. ECS

c. EPSd. BBS

7.Dividend policy influences the dividend.

a. Field

b. Shield

c. Yield

d. None8.Dividend yield is the result of

a. All

b. Dividend rejection

c. Dividend dejection

d. Dividend decision

9.Dividends refer to.

a. None

b. Profit appreciation

c. Profit distribution

d. Profit depreciation


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10.Explicit cost refers to the cost in the form of__________

a. Coupon rate

b. Ration rate

c. Selling rate

d. Pension rate

11.Finance function are closely related to ______decision

a. Financial

b. Profit

c. Functional

d. Final

12.Finance function consists of

a. Investment decision

b. All the three

c. Financing decision

d. Dividend decision13.Finance is like:

a. Bed

b. Shed

c. None

d. Blood

14.Finance is the ________of all organization

a. Life blood

b. Life buoy

c. Life torch

d. Life light


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15.Financial decision are ______in character

a. Logic

b. Magic

c. None

d. Strategic

16.Financial decision relate to____ of funds

a. Acquisition

b. Liquidation

c. Requisition

d. None

17.Financial management deals with effective_______of funds

a. None

b. Deployment

c. Employment

d. Both A and B

18.Financial management is concerned with

a. Concealment of funds

b. Conversion of funds

c. None

d. Procurement fo funds

19.Financing decision relate to fund raising at____

a. None

b. Last cost

c. Lost cost

d. Least cost


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20.Go a of financial management is ___of economic welfare

a. Maximization

b. Minimization

c. Nationalizationd. Normalization

21.implicit cost is not_____.

a. Variable

b. Viable

c. Veritable

d. Visible

22.Invesment decision are also known as

a. Capital budgeting decision

b. Profir decision

c. Capital decision

d. Working capital decision

23.Liquidity decisions are:

a. All

b. Working capital management

c. Capital management

d. Working management

24.Profit maximization ignors __ of money

a. Men value

b. Machine value

c. Time value

d. Cash value


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25.Rate of return required by investor is normally known as:

a. Handle rate

b. Hand -free rate

c. Hurdle rate

d. Harmful rase

26.The basic meaning of finanicial management ist

a. Managing men

b. Managing mobility

c. Managing moneyd. Managing mortality

27.The composion of debt and equity is known as____

a. Capital structure

b. Factory structure

c. None

d. Building structure

28.Wealth maximization means Maximising the _____wealth

a. Nett

b. Net

c. Normal

d. Nominal

29.Wealth maximization to based on.

a. Cash flow

b. None

c. Fund flow

d. Accounting profit


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30.Weath maximization is possible only when an organization______value of share

a. Normalises

b. Decreases

c. None

d. Increases


1.Capital requirment is grouped as

a. Debt capital

b. Equity capital

c. Borrowed capital

d. Fixed and working capital

2.Capitalization refers to the composition of ________ funds

a. Mid term

b. None

c. Long term

d. Short term

3.Corporate objective Should be grouped into

a. Quantitative

b. Qualitative

c. Subjective

d. Both C are B

4.Correct indicator of captilization is _________ of the firm


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a. Dying capacity

b. Earning capacity

c. learning capacity

d. Growing capacity

5.Earning theory also depends on _________ of to industry to which it belongs.

a. Normal earning rate

b. Abnormal earning rate

c. None

d. Non-viable earning rate

6.Earning theroy lay emphassis on the avarage_________ earnings

a. Annual future

b. Annual past

c. Annuated compounding

d. Annuated present

7.Earnings refer to

a. Forceast and accounting

b. Forceast and costing

c. Forceast and capitalised rate

d. Forceast and budgeting

8.Financial plan indicats ________ of funds

a. Autumn

b. Quantum


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c. None

d. Santurm

9.Financial plan should be

a. Flexible

b. Rigid

c. Defunet

d. Dorment

10.Financial plan should observe

a. SEBI guidelines

b. RBI guidelines

c. Company guidelines

d. LIBI guidelines

11.Financial planning deals with

a. Funds allotmentb. None

c. Funds requirement

d. Funds disbursements

12.Long term investments should be normally created out of

a. Medium term basis

b. Long term basis

c. None

d. Short term basis

13.Matching priciples lays emphassis on


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c. None

d. Excess capital

18.Overcapitalization refers to

a. Total capital exceeds true value of assets

b. True value of assets exceeds total capital

c. Total capital equals true value

d. True value equals total capital

19.Percent of sales method is based on

a. Cost with time

b. Cost with cost

c. Cost with sales

d. Cost with profit

20.Size of company influences:

a. Availability of assets

b. None

c. Availability of funds

d. Availability of talent


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1. (l + r)n in the formula represent future value________investment

a. Initial

b. Borrowed

c. Total

d. Fractional

2.A bird in hand is worth two in the ___________

a. Bush

b. Tub

c. Lush

d. Mesh

3.Annuity refers to period flow of __________amount

a. Legal

b. Local

c. Equal

d. Sequal

4.Annunity for an__________ period is perpetvity

a. Deemed


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b. Infinite

c. Delayed

d. Definite

5.Calculation of prinipal amount and compound interest is

a. P (l - r)

b. P (l + r)?n

c. I + r/p

d. P (I + r )

6.Cash inflows will occur only__________

a. Money time

b. Many times

c. Never

d. Once

7.Doubling means making the money

a. Elieminate

b. None

c. Decrease

d. Increase

8.Doubling period concept refers to.

a. Conversion period

b. Money period

c. Convenient period


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d. Time period

9.Doubling results in.

a. None

b. One time

c. Three times

d. Two times

10.For frequent compounding , the formula is.

a. PV/ m*n

b. (m * n )pv

c. None

d. PV ( l + r/n)?m*n

11.Formula to calculate future value is.

a. PV I+ r

b. PV ( l + r)?n

c. PV( l +r )

d. PV ( l -r)

12.Future is characterised by

a. Uncertainty

b. None

c. Loyalty

d. Certainty

13.Future value interest factor for annuity is shortened as:


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a. VIFAV

b. AVIFFA

c. IFVFA

d. FVIFA

14.Future value of money refers to:

a. Repaying power

b. None

c. Redemption power

d. Purchasing power

15.If funds are borrowed externally, repayment is through

a. None

b. Both A and B

c. Principal

d. Interest

16.Long term external borrowings are known as

a. Working capital

b. Winning capital

c. Personal capital

d. Share capital

17.Normally, fixed assets are purchased at the ________

a. End

b. Middle

c. None


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d. Beginning

18.Present value is shortened as.

a. RV

b. KV

c. TV

d. PV

19.Profit Maximization is_________

a. Past based

b. b .Future oriented

c. Present status

d. None

20.Reaping benefits from long term inverstment will be __________planned

a. Longer

b. Immediatec. None

d. Shorter

21.Rule 69 is normally used for calculating

a. Doubling period

b. Daunting period

c. Doubting period

d. Singular period

22.Semi-annually refers to.

a. Hate year


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b. Half year

c. Have year

d. Ham year

23.Single flow refers to.

a. Sum lump

b. Lump sum

c. Lump of sum

d. Sum of lump

24.The difference between Rule 72 and Rule 69 to.

a. None

b. 3 ( C ) - 3

c. 0.35+69/interest rate

25.The formula for compound interest is:

a. A + P

b. A/Pc. A * P

d. None

26.The______ of per PV annuity factor is called capital recovery factor

a. Tricycle

b. Reciprocal

c. None

d. Bifocal

27.Time value of money is also known as_______ of money


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a. Time occrence

b. Time difference

c. Time preferanced. None

28.Time value of money is for ________intervals

a. Different unit

b. None

c. Different time

d. Different project

29.Time value of money is generally expressed as:

a. Proftable rate

b. Dividend rate

c. Sales rate

d. Interest rate

30.Time value of money is the value of_____________money

a. None

b. Distance

c. Unit

d. Time

31.Time value of money is to be read

a. In total


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b. Separetly

c. Independently

d. In fractions

32.Time value of money is _________words

a. One

b. Two

c. Three

d. None

34.Time value of money rate is called as:

a. Customer's rate

b. Retail rate

c. Risk - free rate

d. Rusk - free rate

35.Today, one lives under conditions of

a. None

b. Both A and B

c. Risk

d. Uncertainty

36.Under perpetvity, the period is

a. None

b. Doubtful

c. Definite

d. Infinite

37.Under PV__________ of future cash flows take place


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a. Convertion

b. Deviation

c. Diversion

d. None

38.Value of money remain:

a. None

b. Changes

c. Fixed

d. Diminish

39._______ Fund is created out of fixed payments

a. Singing

b. Sinking

c. Stinking

d. None


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1."Shares are not held in perpetuity" is this statement true?

a. False

b. None

c. Ture

d. Not sure

2.A bond is generally issued at value of Rs.

a. 10

b. 75

c. 100

d. 50

3.A person who possesses a bond is known as

a. shareholder

b. bond holder

c. Pant holder

d. None

4.Amount that can be realised on winding up is:


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a. Liquidation value

b. Limitation value

c. Condonation value

d. Commutation value

5.Assets are recorded at ________cost

a. History

b. Accounting

c. Histotical

d. Geography

6.Bonds are also known as _________bonds

a. perpetual

b. Local

c. Wishful

d. Successful

7.Bonds are issued by

a. Both A and B

b. Government

c. None

d. Big corporate houses

8.Bonds are issued to raise___________funds

a. Lazer

b. Larger

c. Lum - sum

d. Rural


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9.Bonds are traded in _______exchange

a. Telegraph

b. Telephone

c. Local

d. Stock

10.Bonds are __________debt instrument

a. Longer term

b. Long term

c. None

d. Short

11.Bonds issued by government agencies are

a. Solid

b. Liquid

c. Secured

d. Unsecured

12.Book value is an ________concept

a. Accounting

b. Costing

c. b .Missionary

d. Ordinary

13.Book value of share is


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a. Net worth / number of outstanding shares

b. Net worth * o/s shares

c. Net worth + o/s shares

d. Net worth - o/s shares

14.Debts are ____ after a specific period

a. Deliverable

b. Dispensable

c. Disposable

d. Redeemable

15.Dividends are paid out of_________

a. Assets

b. Capital

c. Profit

d. Losses

16.Dividends are paid_____________

a. Abruptly

b. None

c. Annually

d. Actually

17.Dividends are taxable

a. No

b. Agree

c. None

d. Confused


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18.Dividends for perference shareholders can be____________

a. None

b. Cumulated

c. Alleviated

d. Demotivated

19.Equity shareholders are _________ claimants on liquidation

a. Equal

b. Prior

c. Communal

d. Residual

20.Equity shares can be converted

a. Agree

b. Not sure

c. None

d. Disagree

21.Face value of bond is known as ___________ Value

a. Bar

b. Par

c. Star

d. Core

22.Factors affering bond values are relation between.


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a. Kd and discount rate

b. Kd and rowdy rate

c. None

d. Kd and gang rate

23.First dividend is paid after___________ year

a. Three

b. One

c. Five

d. Two

24.Intrinsic value is_________value

a. Perverted

b. Present

c. Presentable

d. Premier

25.Liquidation value is generally __________value

a. Maximum

b. Mutual

c. Market

d. Minimum

26.Market value per share is generally ___________ value

a. National

b. Novel

c. Higher

d. Natural


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27.Maturity period refers to________ value becomes payable

a. Star

b. Par

c. None

d. Bar

28.Net worth is

a. None

b. Paid-up capital + reservers

c. Paid-up capital - reservers

d. Paid-up capital only

29. On liquidation, a business ceases to :

a. Exit

b. Insist

c. Consist

d. Exist

30. Ordinary shares are known as:

a. Equity

b. Excessive

c. Exhasustive

d. Equality

31. Ordinary shares are_________ than bonds and debentures

a. Memorable

b. Merrier


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c. Riskier

d. Capable

32. Perpetual bonds matures after _________ year

a. Ten

b. One

c. Ninety nine

d. None

33. Physical assets are_________assets

a. Normal

b. Typical

c. Conical

d. Real

34. Rate of dividends for preference shareholders are __________

a. Fixed

b. None

c. Variable

d. Flexi

35. Rate of interest for bonds are

a. Variable

b. Fixed

c. Notional

d. National

36. Redemption of debenture may be at :


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a. None

b. Premium or discount or par

c. Par only

d. Preium only

37. Replacement value refers to ____ of exising assets

a. Rewriting

b. Replacement

c. Refinement

d. Redoing

38. Securities are called as _________ assets

a. Abnormal

b. Financial

c. Current

d. Normal

39. Specified rate of interest in the bond is ______ rate

a. Ticket

b. Coupon

c. Ordinary

d. Lottery

40.The amount a business can realise on sale as an operating one is _________ concern

valuea. Growing

b. Grafting

c. Going

d. Governing


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41.The formula for growth in dividends

a. Ke/g

b. D + ke-g

c. D * ke-g

d. D1 / ke-g

42.The return to shareholders are called

a. Evidend

b. Dividend

c. Dependentd. None

43.Valuation refers to finding out the ________ of an asset

a. Worth

b. Length

c. Dearth

d. Depth

44.Value of an asset is worth _________ in terms of benefits

a. Tomorrow

b. Yester years

c. Today

d. Yesterday

45.Value will be stated on the face of__________

a. Bond

b. None

c. Receiver


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d. Giver

46.Y T M refers to

a. Yours to maturityb. Youth to maturity

c. Yield to maturity

d. Yes to maturity

47. Y T M is a _________ Rate

a. Decent

b. Upfront

c. Discount

d. Downward

48.Zero coupon bonds are issued at ________ rate

a. Discount

b. domestic

c. Decent

d. Dollar

49.Zero coupon bonds are known as________bonds

a. Deep discount

b. Deep scar

c. None

d. Deep wound

50.Zero coupon bonds carry :

a. Coupon rate

b. Income rate


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c. None

d. Tax rate

_question bank of financial management_1mark

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