Business Finance MCQs

Question 1

The cost of issuing new stock is called

Accepted Answer

floatation cost

Answer

the cost of equity

Answer

marginal cost of capital

Answer

None of these

Question 2

The date of settlement for a foreign exchange transaction is referred to as

Accepted Answer

Value date

Answer

Clearing date

Answer

Maturity date

Answer

Transaction date

Question 3

Securitisation is a process in which assets are sold to a bankruptcy remote . . . . . . . . in return for an immediate cash payment.

Accepted Answer

special purpose vehicle

Answer

asset reconstruction corporation

Answer

bank or NBFC

Answer

mortgage company

Question 4

The more the currency supply, the more will be

Accepted Answer

Inflation

Answer

Deflation

Answer

No price change

Answer

Disinflation

Question 5

Which of the following project appraisal method is not based on the time value of money?

Accepted Answer

Payback Method

Answer

Net Present Value Method

Answer

Internal Rate of Return Method

Answer

Discounted Payback Method

Question 6

Bank pays interest on

Accepted Answer

Both A and B

Answer

deposits

Answer

loan

Answer

Neither A nor B

Question 7

Which risk arises, if a party discharges his obligations, but the counterparty defaults?

Accepted Answer

Principal risk

Answer

Replacement cost risk

Answer

Systematic risk

Answer

Unsystematic risk

Question 8

Which of the following are the types of hedging strategies?

Accepted Answer

All of the above

Answer

Forward contracts

Answer

Future contracts

Answer

Money markets

Question 9

Equity shareholders are called

Accepted Answer

owners of the company

Answer

guardian of the company

Answer

partners of the company

Answer

executives of the company