MCQ on Advance Financial Management 2

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Objective Questions and Answers of MBA: MCQ on Advance Financial Management 2

Subject: Objective Questions and Answers of MBA: MCQ on Advance Financial Management 2

Part 2: List for questions and answers of Advanced Financial Management

 

Q1. The only feasible purpose of financial management is

a) Wealth Maximization

b) Sales Maximization

c) Profit Maximization

d) Assets maximization

 

Q2. Financial management process deals with

a) Investments

b) Financing decisions

c) Both a and b

d) None of the above

 

Q3. Agency cost consists of

a) Binding

b) Monitoring

c) Opportunity and structure cost

d) All of the above

 

Q4. Finance Function comprises

a) Safe custody of funds only

b) Expenditure of funds only

c) Procurement of finance only

d) Procurement and effective use of funds

 

Q5. The objective of wealth maximization takes into account

a) Amount of returns expected

b) Timing of anticipated returns

c) Risk associated with uncertainty of returns

d) All of the above

 

Q6. Financial management mainly focuses on

a) Efficient management of every business

b) Brand dimension

c) Arrangement of funds

d) All elements of acquiring and using means of financial resources for financial activities 

 

Q7. Time value of money indicates that

a) A unit of money obtained today is worth more than a unit of money obtained in future

b) A unit of money obtained today is worth less than a unit of money obtained in future

c) There is no difference in the value of money obtained today and tomorrow

d) None of the above

 

Q8. Time value of money supports the comparison of cash flows recorded at different time period by

a) Discounting all cash flows to a common point of time

b) Compounding all cash flows to a common point of time

c) Using either a or b

d) None of the above

 

Q9. If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be

a) 10% per annum

b) 10.10 per annum

c) 10.25%per annum

d) 10.38% per annum

 

Q10. Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one

a) Effective rate greter than Nominal rate

b) Effective rate greater than Nominal rate

 

Q11. Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments

a) Rs 19500

b) Rs 19400

c) Rs 19310

d) None of the above 

 

Q12. If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per annum, determine the frequency of compounding

a) 1

b) 2

c) 3

d) None of the above

 

Q13. Present value tables for annuity cannot be straight away applied to varied stream of cash flows

a) True

b) False

 

Q14. Heterogeneous cash flows can be made comparable by

a) Discounting technique

b) Compounding technique

c) Either a or b

d) None of the above

 

Q15. Risk of two securities with different expected return can be compared with

a) Coefficient of variation

b) Standard deviation of securities

c) Variance of Securities

d) None of the above

 

Q16. A portfolio having two risky securities can be turned risk less if

a) The securities are completely positively correlated

b) If the correlation ranges between zero and one

c) The securities are completely negatively correlated

d) None of the above

 

Q17. Efficient frontier comprises of

a) Portfolios that have negatively correlated securities

b) Portfolios that have positively correlated securities

c) Inefficient portfolios

d) Efficient portfolios 

 

Q18. Efficient portfolios can be defined as those portfolios which for a given level of risk provides

a) Maximum return

b) Average return

c) Minimum return

d) None of the above

 

Q19. Capital market line is

a) Capital allocation line of a market portfolio

b) Capital allocation line of a risk free asset

c) Both a and b

d) None of the above

 

Q20. CAPM accounts for

a) Unsystematic risk

b) Systematic risk

c) Both a and b

d) None of the above

 

Part 2: List for questions and answers of Advanced Financial Management

 

Q1. Answer: a

Q2. Answer: b

Q3. Answer: d

Q4. Answer: d

Q5. Answer: d

Q6. Answer: d

Q7. Answer: a

Q8. Answer: c

Q9. Answer: d

Q10. Answer: a

Q11. Answer: c

Q12. Answer: b

Q13. Answer: b

Q14. Answer: c

Q15. Answer: a

Q16. Answer: c

Q17. Answer: d

Q18. Answer: a

Q19. Answer: c

Q20. Answer: b