MCQ on Management of Financial Services 4

Lets Crack Online Exam

Objective Questions and Answers of MBA: MCQ on Management of Financial Services 1

Subject: Objective Questions and Answers of MBA: MCQ on Management of Financial Services 4

Part 4: List for questions and answers of Management of Financial Services


Q1. The primary objective of IDBl is to ——– Regulate and Supervise the working of other financial institutions like lFCI, SFCs, UTI

a) Co-ordinate

b) Control

c) Planning

d) None of these


Q2. All India financial Institutions are

a) Industrial Development Bank of India (IDBI)

b) Industrial Finance Corporation of India (lFCI)

c) Industrial Credit and Investment Corporation of India (ICICI)

d) All of the above


Q3. The lDBI underwrites and ————— the shares and debentures of industrial concern s

a) imposses on

b) subscribes to

c) targets

d) none of these


Q4. The IDBl can grant a ———— and advances to other financial institutions

a) Line of credit

b) Loans

c) Both (a) and (b)

d) None of these


Q5. According to Fayol the terms “Management” and “Administration” are

a) Same

b) Different

c) He did not consider it all

d) None of the above


Q6. lndustrial Development Bank of India is

a) Wholly-owned Government of India undertaking

b) Wholly-owned subsidiary of Reserve Bank of India

c) A corporation and owned by Government of lndia and public sector banks

d) Public Limited Company 


Q7. The IDBI was established in

a) 1964

b) 1965

c) 1966

d) 1967


Q8. The UTI was established in

a) 1962

b) 1963

c) 1964

d) 1965


Q9. The financial institute IFCI established in

a) 1947

b) 1948

c) 1949

d) 1950


Q10. Bank of the Middle East, Dubai is maintaining an account with SBI Mumbai. SBI Mumbai calls this account as

a) Nostro account

b) Vostro account

c) Loro account

d) Mirror account


Q11. Suppose that a speculator anticipates depreciation of US $ against Euro 3-months from now from the current 3 months forward rate. To make profit, the speculator should

a) Sell US $ spot and buy Euro 3-month forward

b) Buy US $ spot and sell Euro 3-month forward

c) Sell US $ 3-month forward

d) Buy Euro 3-month forward


Q12. The value of a forward contract at its initiation is

a) Zero

b) Forward price

c) Bid – ask spread

d) Spot price minus forward price 


Q13. In a swap transaction where two fixed-floating currency swaps are combined to form a fixed to fixed currency swap is known as

a) Roller-coaster swap

b) Amortized swap

c) Amortizing swap

d) Circus swap


Q14. Which of the following is an example of systematic risk?

a) Risk of non-availability of a major raw material to a company making aluminium bars

b) Death of the finance manager of a company providing financial services

c) Unexpected entry of a multi-national company in the tea industry

d) Reduction of tax rate by the government


Q15. If a security’s return is plotted above the security market line, then

a) The risk free rate is equal to the required rate of return on the security

b) The security’s rate of return is more than the return on the market portfolio

c) The security’s beta is less than one and hence a conservative security

d) The security is to be bought immediately


Q16. Other things being equal, which of the following will cause an increase in the value of a bond?

a) Decrease in the term to maturity

b) Increase in the required rate of return on maturity

c) Decrease in the discount on the bond on issue

d) Increase in the premium on maturity of the bond


Q17. The amount that can be realized by a company if it sells its business as an operating one is termed as

a) Going concern value

b) Market value

c) Book value

d) Replacement value


Q18. Which of the following is true with regard to the degree of operating leverage (DOL) for a company?

a) Irrespective of the level of output, DOL of a company remains same

b) DOL of a company is positive above the operating break-even point

c) DOL of a company is positive below the operating break-even point

d) DOL of a company is negative above the operating break-even point 


Q19. Which of the following is a liquidity ratio?

a) Return on equity

b) Return on investment

c) Acid -test ratio

d) Debt-equity ratio


Q20. The objective of financial management to increase the wealth of the shareholders means to

a) Increase the physical assets owned by the firm

b) Increase the market value of the shares of the firm

c) Increase the current assets of the firm

d) Increase the cash balance of the company


Part 4: List for questions and answers of Management of Financial Services


Q1. Answer: a

Q2. Answer: d

Q3. Answer: b

Q4. Answer: c

Q5. Answer: a

Q6. Answer: b

Q7. Answer: a

Q8. Answer: b

Q9. Answer: b

Q10. Answer: b

Q11. Answer: d

Q12. Answer: a

Q13. Answer: d

Q14. Answer: d

Q15. Answer: d

Q16. Answer: d

Q17. Answer: a

Q18. Answer: b

Q19. Answer: c

Q20. Answer: b