Finance MCQs

Page No. 38

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


aDividend Price Model


bDividend Growth Model


cDividend Policy Model


dAll of the given options


View Answer Dividend Growth Model

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


aSunk cost


bOpportunity cost


cFinancing cost


dAll of the given options


View Answer Opportunity cost

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


aHomemade leverage


bFinancial leverage


cOperating leverage


dNone of the given option


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


bPortfolio risk


cOperating risk


dMarket risk


View Answer Financial risk

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


aBank loan


bCommercial papers


cTrade credit


dNone of the given options.


View Answer Trade credit

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


a-1


b0


c1


d2


View Answer 1

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


aHigher


bLower


cConstant


d None of the given options


View Answer Higher

Which of the following statement is CORRECT regarding compound interest?


aIt is the most basic form of calculating interest.


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


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


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



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


bTo maintain a low ratio of current assets to sales


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


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



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


aStock Bundle


bPortfolio


c Capital Structure


dNone of the given options


View Answer Portfolio

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