Business Finance MCQs

Question 1

Operating leases are mostly . . . . . . . . agreements.

Accepted Answer

short-term

Answer

long-term

Answer

medium-term

Answer

verbal

Question 2

Working capital is

Accepted Answer

Equity plus long-term debt minus non-current assets

Answer

WCR plus short-term debt plus cash

Answer

WCR minuss hort-term debt minus cash

Answer

Equity plus long-term debt plus non-current assets

Question 3

Which of the following statement(s) is/are incorrect?

Accepted Answer

Cost of capital means the minimum rate of return, which a company should get on its investment

Answer

Retained earnings have no cost because no interest or dividend is paid on them

Answer

Both A and B

Answer

None of the above

Question 4

Which of the following premiums is called the difference between the expected return on common stock and a current yield of treasury bonds?

Accepted Answer

Current risk premium

Answer

Past risk premium

Answer

Beta premium

Answer

Expected premium

Question 5

Which of the following concept measures the variability in returns for a given security in relation to variation in returns in the market returns as a whole?

Accepted Answer

Beta factor

Answer

Alpha factor

Answer

Weighted average cost of capital

Answer

Diversification

Question 6

Capital budgeting is also known as

Accepted Answer

All of the above

Answer

investments decision-making

Answer

capital expenditure decisions

Answer

planning capital expenditure

Question 7

Which of the following function is performed by multilateral netting?

Accepted Answer

It reduces the cost of moving funds from one currency or country to another

Answer

It lowers the exchange rate paid to move funds from one currency or country to another

Answer

It raises the exchange rate paid to move funds from one currency or country to another

Answer

It increases the cost of moving funds from one currency or country to another

Question 8

Patterns of capital structure include

Accepted Answer

All of the above

Answer

Only equity shares

Answer

Equity shares + Preference shares

Answer

Equity shares + Debentures

Question 9

Financial Instruments issued with detachable warrants and redeemable after certain period are known as:

Accepted Answer

Secured Premium Notes

Answer

Deep Discount Bonds

Answer

Bunny Bonds

Answer

Junk Bonds