Finance MCQs

Page No. 38

A model which makes an assumption about the future growth of dividends is known as:


aDividend Price Model

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bDividend Growth Model

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cDividend Policy Model

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dAll of the given options

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View Answer Dividend Growth Model

_________ refers to the most valuable alternative that is given up if a particular investment is undertaken?


aSunk cost

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bOpportunity cost

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cFinancing cost

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dAll of the given options

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View Answer Opportunity cost

The use of Personal borrowing to alter the degree of financial leverage is called__________?


aHomemade leverage

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bFinancial leverage

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cOperating leverage

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dNone of the given option

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View Answer Homemade leverage

_______________refers to the extent to which fixed-income securities (debt and preferred stock) are used in a firm’s capital structure?


aFinancial risk

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bPortfolio risk

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cOperating risk

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dMarket risk

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View Answer Financial risk

Which of the following is the cheapest source of financing available to a firm?


aBank loan

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bCommercial papers

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cTrade credit

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dNone of the given options.

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View Answer Trade credit

Profitability index (PI) rule is to take an investment, if the index exceeds___________?


a-1

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b0

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c1

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d2

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View Answer 1

When real rate is high, all the interest rates tend to be ___________?


aHigher

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bLower

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cConstant

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d None of the given options

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View Answer Higher

Which of the following statement is CORRECT regarding compound interest?


aIt is the most basic form of calculating interest.

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bIt earns profit not only on principal but also on interest.

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cIt is calculated by multiplying principal by rate multiplied by time.

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d It does not take into account the accumulated interest for calculation.

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Which of the following strategy belongs to restrictive policy regarding size of investments in current assets?


a To maintain a high ratio of current assets to sales

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bTo maintain a low ratio of current assets to sales

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cTo less short-term debt and more long-term debt

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dTo more short-term debt and less long-term debt

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Which of the following is known as the group of assets such as stocks and bonds held by an investor ?


aStock Bundle

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bPortfolio

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c Capital Structure

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dNone of the given options

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View Answer Portfolio

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