Financial Management MCQ Questions and Answer PDF Download

Financial Management Multiple Choice Questions >> Financial Management MCQ Online Test and Answer

Financial Management :  FM is the planning, directing, monitoring, organizing, and controlling of the monetary resources of an organization. Financial management example of company includes hiring new employees, project budgets, managing telephone cost etc. The purpose of (FM) financial management is the planning, directing, monitoring, organizing and controlling of the monetary resources of the organization. The financial manager will be  expected Bachelor degree course like maths, accounting, finance or Economics. People those who hugely ambitious but who also have a well knowledge for economics, accounting and the ability to quickly and process complex financial concepts and data.

Financial Management MCQ Quiz: Here, we have listed the 30 Financial Management multiple choice questions are given below. Financial Managers will not be hired straight out of without knowledge in a related field. So candidate Practice these type of Financial Management MCQ daily to get more knowledge as well as develop skills. Candidate read the entire questions and answer following questions carefully. Those who are interested in this field, let practice the below Financial Management MCQ Online Quiz. We have currently updated the below MCQ Questions. Candidates are advised to use this below MCQ Questions.

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Multiple Choice Questions and Answers of Financial Management.

1. In his traditional role the finance manager is responsible for ___________.

B. proper utilization of funds

C. arrangement of financial resources

D. efficient management of capital

Answer: arrangement of financial resources

2. Which one of the following is not a money market securities?

B. National savings certificate

C. Treasury bills

D. Commercial paper

Answer: National savings certificate

3. Capital budgeting is related to ________

A. long terms and short terms assets

B. short term assets

C. long terms assets

D. fixed assets

Answer: long terms assets

4. Working capital management is managing ____________.

A. long terms liabilities

B. short term assets and liabilities

C. long term assets

D. only short term assets

Answer: short term assets and liabilities

5. ___________ are financial assets.

A. Machines

B. Bonds

C. Stocks

D. Both B & C

Answer: Both B & C

6. Present value takes _________.

A. Compounding rate

B. Inflation rate

C. Discounting rate

D. Deflation rate

Answer: Discounting rate

7. The expansion of CAPM is ____________.

A. Capital asset pricing model

B. Capital amount pricing model

C. Capital asset printing model

D. Capital amount printing model

Answer: Capital asset printing model

8. Market value of the shares are decided by ____________.

B. the investment market

C. the respective companies

D. shareholders

Answer: the investment market

9. Financial leverage measures ____________.

A. sensitivity of EPS with respect to % change in level of EBIT

B. % variation in the level of production

C. sensitivity of EBIT with respect of % change with respect to output

D. no change with EBIT and EPS

Answer: sensitivity of EPS with respect to % change in level of EBIT

10. Future value interest factor takes ____________.

A. Discounting rate

B. Compounding rate

C. Inflation rate

D. Deflation rate

Answer: Compounding rate

11. Investment is the _______________.

A. person’s commitment to buy a flat or house

B. net additions made to the nation’s capital stocks

C.  employment of funds on assets to earn returns

D. employment of funds on goods and services that are used in production process

Answer: employment of funds on assets to earn returns

12. Operating leverage measures ____________.

A. production risk

B. financial risk

C. business risk

D. both risks

Answer: business risk

13. The underwriter has to take up ________________.

A. the unsubscribed part of the agreed portion

B. the fixed portions of the issue capital

C. the unfixed portions of the issue capital

D. the agreed portion or can refuse if

Answer: the unsubscribed part of the agreed portion

14. An example of a derivative security is ______.

A. a commodity futures contract

B. a common share of General Motors

C. a call option on Mobil stock

D. Both A & C

Answer: Both A & C

15. The company’s average cost of capital is ____________.

A. the average cost of equity preference shares

B. the average cost of equity shares and debentures

C. the average cost of short term funds

D. the average cost of shares and all sources of long-term funds

Answer: the average cost of shares and all sources of long-term funds

16. Operating leverage x Financial leverage = ________

A. Fixed leverage

B. Financial Combined Leverage

C. Combined Leverage

D. Operating Combined Leverage

Answer: Combined Leverage

17. Traditional approach confines finance function only to _________ funds

A. utilizing

B. mobilizing

C. raising

D. financing

Answer: raising

18. Most investors are risk averse which means____________.

A. they will always invest in the investment with the lowest possible risk

B. they will always invest in the investment with the lowest possible risk

C. they will assume more risk only if they are compensated by higher expected return

D. they avoid the stock market due to the high degree of risk

Answer: they avoid the stock market due to the high degree of risk

19. Financial leverage helps one to estimate ____________.

A. financial risk

B. business risk

C. both risks

D. production risk

Answer: financial risk

20. Which of the following would be considered a risk-free investment?

A. High-grade corporate bonds

B. Equity in a house

C. Gold

D. Treasury bills

Answer: Treasury bills

21. The company’s cost of capital is called ________.

A. Hurdle rate

B. Leverage

C. Risk rate

D. Return rate

Answer: Hurdle rate

22. Cost of retained earnings is equal to _______.

A. Cost of term loans

B. Cost of debt

C. Cost of bank loan

D. Cost of equity

Answer: Cost of equity

23. Beta measures the ________.

A. Market and finance risk

B. Financial risk

C. Market risk

D. Investment risk rate

Answer: Market risk

24. The primary goal of the financial management is ____________.

B. to maximize the return

C. to minimize the risk

D. to maximize profit

Answer: to maximize the wealth of owners

25. EBIT is usually the same thing as__________

A. earnings before taxes

B. funds provided by operations

C. operating profit

D. net income

Answer: operating profit

26. The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called ____________.

B. working capital decision

C. a production decision

D. a sales decision

Answer: an investment decision

27. The largest single institutional owner of common stocks is________.

A. pension funds

B. insurance companies

C. mutual funds

D. commercial banks

Answer: mutual funds

28. Savings accounts are___________ but are not__________.

B. liquid; personal

C. liquid; marketable

D. negotiable; liquid

Answer: liquid; marketable

29. Operating incomes and the discount rate of a particular risk class are the 2 factors determining ____________.

A. Modern view

B.Traditional view

C. Dependence hypothesis

D. Independence hypothesis

Answer: Independence hypothesis

30. Financial Management is mainly concerned with ______________.

A. Efficient Management of every business

B. All aspects of acquiring and utilizing financial resources for firms activities

C. Arrangement of funds

D. Profit maximization

Answer: All aspects of acquiring and utilizing financial resources for firms activities

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