Correct Answer:
A. 11%
Ke = 5% + 1.2 x (10% - 5%) = 11%.
November 13, 2026 · Accounting and Finance MCQs, Financial Management & Analysis MCQs
Risk-free rate is 5%, beta is 1.2 and expected market return is 10%. The cost of equity under CAPM is:
Related MCQs
Total variable cost:
A.
Remains constant regardless of activity
B.
Changes in direct proportion to changes in activity level
C.
Decreases as activity increases
D.
Is always zero
Correct answer is:
B. Changes in direct proportion to changes in activity level
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Repayment of a long-term bank loan is classified as a cash flow from:
A.
Operating activities
B.
Investing activities
C.
Non-cash activities
D.
Financing activities
Correct answer is:
D. Financing activities
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Computer-assisted audit techniques (CAATs) are used by auditors to:
A.
Replace professional judgment entirely
B.
Prepare the client's tax returns
C.
Avoid documenting the audit
D.
Analyze large volumes of electronic data and test systems and controls
Correct answer is:
D. Analyze large volumes of electronic data and test systems and controls
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State-owned enterprises (SOEs) in Pakistan are typically audited by:
A.
Only by their own accountants
B.
Only by tax inspectors
C.
Only by the police
D.
Chartered accountant firms appointed under law, and may also be subject to audit by the Auditor-General
Correct answer is:
D. Chartered accountant firms appointed under law, and may also be subject to audit by the Auditor-General
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The purpose of an Emphasis of Matter paragraph in the auditor's report is to:
A.
Correct a material misstatement in the financial statements
B.
Draw users' attention to a matter properly presented or disclosed that is fundamental to understanding the financial statements
C.
Modify the audit opinion
D.
Replace the opinion paragraph
Correct answer is:
B. Draw users' attention to a matter properly presented or disclosed that is fundamental to understanding the financial statements
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If the marginal propensity to consume (MPC) is 0.8, the simple expenditure multiplier is:
A.
5
B.
1.25
C.
0.8
D.
0.2
Correct answer is:
A. 5
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