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FM MCQs MBA II Sem

This document contains 40 multiple choice questions related to the subject of finance management for an MBA exam. The questions cover a range of topics including financial management functions and objectives, the role of the finance manager, types of risk, tools for measuring risk, components of return, the Indian financial structure, principles of capital budgeting, methods of appraisal, cost of capital determination, capital structure, dividends, working capital, cash management, and motives for holding cash.

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KNRavi Kiran
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1K views6 pages

FM MCQs MBA II Sem

This document contains 40 multiple choice questions related to the subject of finance management for an MBA exam. The questions cover a range of topics including financial management functions and objectives, the role of the finance manager, types of risk, tools for measuring risk, components of return, the Indian financial structure, principles of capital budgeting, methods of appraisal, cost of capital determination, capital structure, dividends, working capital, cash management, and motives for holding cash.

Uploaded by

KNRavi Kiran
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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FM Question Paper External

MBA 2 sem External MCQs. 40 Questions.

Q 1 . What are the functions of Financial Mgt?


A. Financing Decisions
B. Investment Decisions
C. Dividend Decisions
D. All of the above

Q 2.What are the objectives of Financial Mgt?


A. Profit Maximisation
B. Wealth Maximisation
C. Both of the above
D. None of the above

Q 3.What is the role of The Finance Manager?


A. Raising funds for the Company
B. Investing the raised funds in optimal investments
C. Taking Maximum benefits from Leverages
D. All of the above

Q 4. What are the Causes of the Risk?


A. Wrong Decisions
B. Wrong Timing
C. Amount of Investment
D. All of the above

Q 5. What are the types of Systematic Risk?


A. Market Risk
B. Interest Rate Risk
C. Purchasing Power Risk
D. All of the above

Q 6. What are the Tools for Measuring Risk?


A. Range
B. Standard Deviation
C. Variance
D. All Of the Above

Q 7. What are the components of Return?


A. Current Return
B. Capital Return
C. Capital Gain
D. All of the above
Q 8. Components of Indian Financial Structure?
A. Financial Institutions
B. Financial Markets
C. Financial Assets/ Instruments/Financial Services
D. All of the above

Q 9. What are the Principles of Capital Budgeting?


A. Decisions are based on Cash Flows
B. Cash Flow Timing
C. Use of Opportunity Cost
D. All of the above

Q 10.What are the Methods of Appraisal in Capital Budgeting?


A. Traditional Methods
B. Modern Methods
C. Both of the Above
D. None of the above

Q 11. What are the different Modern Methods?


A. Net Present Value
B. Internal Rate of Return
C. Profitability index
D. All of the above

Q 12.What is ARR?
A. Adjusted Rate of Return
B. Accounting Rate of Return
C. Available Rate of Return
D. All of the above

Q 13.What are the Decisions in NPV?


A. NPV=0=Indifferent
B. NPV>0=Accept
C. NPV<0=Reject
D. All of the above

Q 14.What is IRR?
A. PVCIF>PVCOF
B. PVCIF=PVCOF
C. PVCIF<PVCOF
D. All of the above

Q 15.What is the Principle of Profitability Index?


A. PI<1=REJECT
B. PI>1=ACCEPT
C. PI=1=INDIFFERENT
D. All of the above
Q 16.What are the Methods of Risk Analysis ?
A. Standard Deviation
B. Simulation
C. Risk Adjusted Discounted Rate
D. All of the above

Q 17. What are the features of Cost of Capital?


A. Not necessarily a Cash Cost
B. Minimum Rate of Return
C. Consideration of Risk Premium
D. All of the above

Q 18.What factors Influence Cost of Capital?


A. Amount of financing
B. Economic Conditions
C. Market Conditions
D. All of the above.

Q 19.What are the Problems in determination of Cost of Capital?


A. Mode and Quantum of Financing
B. Computing Cost of Retained Earnings
C. Future costs (vs) Historical Costs
D. All of the above

Q 20.What are different sources of finance in Cost of Capital?


A. Cost of Debt
B. Cost of Equity Shares and Retained Earnings?
C. Cost of Preference Shares
D. All of the above

Q 21. What is WACC?


A. Weighted Average of Cost of Capital
B. Working Average Cost of Capital
C. Weighted Average Cash Costs
D. Working Average Cash Costs

Q 22.What are different types of Leverages?


A. Operating Leverage
B. Financial Leverage
C. Combined Leverage
D. All of the above
D. Option 5

Q 23. What is EPS?


A. Extra Premium per Share
B. Earnings Per Share
C. Extra Percentage Share
D. All of the above
Q 24.What is EBIT
A. Extra Bonus In Time Period
B. Earnings Before Income Tax
C. Earnings Before Interest and Tax
D. All of the above

Q 25.What are the components of Capital Structure?


A. Owners Capital
B. Borrowed Capital
C. Both of the Above
D. None

Q 26.Features of Optimal Capital Structure?


A. Profitability
B. Solvency
C. Flexibility
D. All of the above

Q 27. What factors affect Capital Structure?


A. Financial Leverage
B. Operating Leverage
C. EBIT-EPS Analysis
D. All of the above

Q 28. What are different Capital structure Theories?


A. NI Approach
B. NOI Approach
C. MM Approach
D. All of the above

Q 29.What is the Base for Dividends?


A. Types of Shares
B. Mode of Payment
C. Time of Payment
D. All of the above

Q 30. What are the Determinents ofDividend?


A. Legal Binding
B. Size of the Earnings
C. Liquidity Position
D. All of the Above

Q 31. What is Working Capital?


A. Current Assets + Current Liabilities
B. Current Assets - Current Liabilities
C. Current Assets * Current Liabilities
D. Current Assets / Current Liabilities
Q 32. What is Gross Working Capital?
A. Total of All Assets
B. Total of Current Liabilities
C. Total of Current Assets
D. All of the above

Q 33. Stocks include ....?


A. Raw Materials
B. Work in Progress
C. Finished Goods
D. All of the above.

Q 34. Main Components of Current Assets?


A. Cash and Bank
B. Inventory
C. Bill Receivable and Debtors
D. All of the above

Q 35.Main Components of Current Liabilities?


A. Bank Over Draft
B. Bills Payable and Creditors
C. Short Term Loans
D. All of the above.

Q 36. What are different Working Capital Strategies?


A. HEDGING/MATCHING
B. Conservative Policy
C. Aggressive and Zero WC Policy
D. All of the above

Q 37. Methods of forecasting Working Capital?


A. WC as a percentage of Net Sales
B. WC as percentage of Total Assets / Fixed Assets
C. Projected B/S Method and Adjusted P&L Method
D. All of the Above

Q 38. What factors affect Receivables?


A. Size of Credit Sales and Expansion Plans
B. Credit Policies and Habits of Customers
C. Terms of Trade and Relation with Profits
D. All of the above

Q 39. What are the objectives of Cash Management?


A. Meeting the Payment Schedule
B. Minimising Funds committed to Cash Balance
C. Meeting unplanned and contingencies
D. All of the above
Q 40. What are the Motives of Holding Cash?
A. Transaction Motive
B. Precautionary Motive
C. Speculative Motive
D. All of the above.

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