Correct Answer:
A. Unsystematic (specific) risk
Company-specific risk can be reduced by holding a diversified portfolio; market risk remains.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
Diversification can eliminate:
Related MCQs
Sales tax in the form of a value added tax (VAT) is levied on:
A.
Final retail price only, once
B.
Profits of companies
C.
Value added at each stage of production and distribution
D.
Wealth of individuals
Correct answer is:
C. Value added at each stage of production and distribution
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A contingency fund is:
A.
A fund kept to meet urgent unforeseen expenditure
B.
A fund for planned salaries
C.
A fund for repayment of loans only
D.
A private fund of officers
Correct answer is:
A. A fund kept to meet urgent unforeseen expenditure
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In public sector internal control, the main purpose of segregation of duties is to:
A.
Increase the number of staff only
B.
Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
C.
Avoid the need for budgets
D.
Speed up audits
Correct answer is:
B. Reduce the risk of error, fraud and misappropriation by dividing incompatible functions
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Current assets are Rs. 250,000, inventory is Rs. 100,000 and current liabilities are Rs. 100,000. The quick ratio is:
A.
1.5
B.
2.5
C.
1.0
D.
0.4
Correct answer is:
A. 1.5
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Which of the following is an example of a substantive procedure?
A.
Sending confirmation requests to a sample of customers
B.
Observing segregation of duties in the purchasing department
C.
Inquiring about the approval process for payments
D.
Walking through the payroll system
Correct answer is:
A. Sending confirmation requests to a sample of customers
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The tax shield on debt arises because:
A.
Dividends are tax deductible
B.
Debt is risk free
C.
Principal repayments are deductible
D.
Interest is a tax-deductible expense
Correct answer is:
D. Interest is a tax-deductible expense
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