Business Finance MCQs

Question 1

Under the terms of finance lease

Accepted Answer

the asset is capitalised in the balance sheet of the lessee

Answer

the lessor is responsible for service and maintenance of the asset

Answer

it is cancellable

Answer

legal title to the assets with the lessee

Question 2

The potential effect of exchange rate fluctuations on FDI is expressed as

Accepted Answer

economic

Answer

translation

Answer

transaction

Answer

conversion

Question 3

We should keep our savings with banks because

Accepted Answer

All of the above

Answer

it is safe

Answer

earns interest

Answer

can be withdrawn anytime

Question 4

Government grants are generally offered to businesses in

Accepted Answer

economically deprived areas

Answer

prosperous areas

Answer

cold areas

Answer

areas with high employment

Question 5

The capital budgeting technique that explicitly incorporates an estimated interest rate into its basic computations is the

Accepted Answer

NPV method

Answer

payback period method

Answer

accounting rate of return method

Answer

internal rate of return method

Question 6

Which of the following can be defined as the prominent sources of variable working capital? (i) Trade creditors (ii) Bank loan (iii) Commercial Papers (iv) Depreciation (v) Tax liabilities

Accepted Answer

(i), (ii), (iii), (iv), (v)

Answer

(i), (ii), (iii), (iv)

Answer

(i), (iii), (iv), (v)

Answer

(ii), (iii), (iv), (v)

Question 7

Which of the following can be defined as the variability of return on stocks or portfolios, not explained by general market movement. It is avoidable through diversification.

Accepted Answer

Unsystematic risk

Answer

Systematic risk

Answer

Standard deviation

Answer

Coefficient of variation

Question 8

Capital market line is

Accepted Answer

Both A and B

Answer

Capital allocation line of a market portfolio

Answer

Capital allocation line of a risk free asset

Answer

Neither A nor B

Question 9

In which of the following stock exchanges, the GDRs are listed? 1. London Stock Exchange 2. New York Stock Exchange 3. Luxembourg Stock Exchange 4. Bombay Stock Exchange 5. Singapore Stock Exchange 6. Hong Kong Stock Exchange Select the correct answer using the options given below

Accepted Answer

1, 3, 5 and 6

Answer

1, 2 and 3

Answer

1, 4, and 6

Answer

3, 5 and 6