Which of these is a motive for holding cash?
Correct answer is: D. All of the above
Financial Management Mcqs
here are key Multiple Choice Questions (MCQs) on Financial Management, covering core topics like capital budgeting, cost of capital, and financial analysis.
What is the term for the return that is forgone by investing in a project rather than investing in financial markets at the same level of risk?
Correct answer is: C. Opportunity cost
If your income exceeds the amount that you wish to spend, you should ____________ your investments or ____________ loans.
Correct answer is: B. increase; repay existing
Which of the following is NOT a type of decision made to manage your liquidity?
Correct answer is: D. How much money you can borrow to spend on a car
What does the term “blue chip” refer to?
Correct answer is: B. Large, stable, well-established company
A portion of profits that a company distributes among its shareholders is known as:
Correct answer is: A. Dividends
Which of the following is NOT a key component of a complete personal financial plan?
Correct answer is: C. Plan for working at a major brokerage firm
What does the term “float” refer to in cash management?
Correct answer is: A. Time between writing a check and funds being debited
Financial leverage is considered favorable when:
Correct answer is: B. ROI is greater than cost of debt
An investment which gives the holder a regular income in return for one initial payment may be known as a(n):
Correct answer is: B. Annuity
A __________ represents the composition of a firm’s long-term funds and its capital structure.
Correct answer is: A. Capitalisation
Which of these is an example of a tangible source of short-term financing?
Correct answer is: D. Bank loan
Which of the following is an example of spontaneous financing?
Correct answer is: B. Accounts payable
What is sensitivity analysis in capital budgeting?
Correct answer is: A. Change in NPV due to change in an input variable
The strength and vigor of a firm’s overall financial posture is referred to as:
Correct answer is: B. Stability
The job of a finance manager is confined to:
Correct answer is: C. Raising of funds and their effective utilization