Introduction to Finance MCQs

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Learning Objectives

After practice this MCQs set, you should be able to:

MCQs 1 to 20

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Which of the following is a depository financial institution?

A pension fund

A finance company

A savings bank

An investment bank

Correct! Wrong!

Finance has its origins in?

Economics and statistics

Accounting and economics

Psychology and mathematics

Accounting and sociology

Correct! Wrong!

Finance is?

The study of how governments and businesses acquire, spend, and manage money and other financial assets

None of the above

The study of how individuals, institutions, governments, and businesses acquire, spend, and manage money and other financial assets

The study of how businesses acquire, spend, and manage money and other financial assets

Correct! Wrong!

The primary goal of the financial manager of a profit-seeking organization is to?

Have healthy cash flow

Maximize the owners’ wealth

Increase sales and profit

Maximize market share

Correct! Wrong!

The controller’s responsibilities are primarily in nature, while the treasurer's responsibilities are primarily related to?

Financial management; Accounting

Financial management; Operations

Accounting; Financial management

Operational; Financial management

Correct! Wrong!

The Financial institutions makes it easier to trade because it?

Channels Funds from Savers to Borrowers

Enables Risk Sharing

All of the given options

Facilitate Payments

Correct! Wrong!

The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently?

Operating environment

Regulatory environment

International environment

Financial environment

Correct! Wrong!

What are the three interrelated areas of finance?

Investment, Financial management and Financial market & Financial institution

Financial markets, option and forwards

All of given options

Banking, financial institutions and swap currency

Correct! Wrong!

What should be the long term focal point of financial management in a firm?

The number and types of products or services provided by the firm

The creation of value for shareholders

The minimization of the amount of taxes paid by the firm

The profits earned by the firm

Correct! Wrong!

If an investor were to sell 100 shares of Microsoft stock to another investor in the securities market, this would be referred to as what type of transaction?

A secondary market transaction

It is primary market transaction

A futures market transaction

A money market transaction

Correct! Wrong!

__________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind?

Social responsibility

Profit maximization

Financial management

Agency theory

Correct! Wrong!

___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors?

Federal agencies

International financial organizations

Financial Institutions

Financial market organizations

Correct! Wrong!

Among the pairs given below select a (n) example of a principal and a (n) example of an agent respectively?

Shareholder; bondholder

Accountant; bondholder

Shareholder; manager

Manager; owner

Correct! Wrong!

In finance, we refer to the market where new securities are bought and sold for the first time?

Capital market

Primary market

Money market

Secondary market

Correct! Wrong!

Which of the following statements always apply to corporations?

Mix of ownership and control

Limited liability

Single taxation

Limited life

Correct! Wrong!

Which of the following is the activity in which finance people are involved?

Marketing decisions

Investing decisions

Promotion decisions

HR decisions

Correct! Wrong!

Financial decisions are concerned with which of the following?

Raising capital that is needed for growth

Making investment decisions that optimize economic value

All of given options

Making asset management decisions that optimize economic wealth

Correct! Wrong!

Financing decision determines?

Current asset

Fix asset

Equity

Mix of finance

Correct! Wrong!

Which of the following is a money market instrument?

Treasury bill

Corporate bonds

Stocks

Correct! Wrong!

The purpose of financial markets is to?

Control inflation

Lower the yield on bonds

Allocate savings efficiently

Increase the price of common stocks

Correct! Wrong!

Introduction to Finance

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Introduction to Finance MCQs

Learning Objectives

MCQs 1 to 20

Which of the following is a depository financial institution?

Finance has its origins in?

Finance is?

The primary goal of the financial manager of a profit-seeking organization is to?

The controller’s responsibilities are primarily in nature, while the treasurer's responsibilities are primarily related to?

The Financial institutions makes it easier to trade because it?

The ______________ is a term used to describe the financial system, institutions, markets, businesses, individuals, and global interactions that help the economy operate efficiently?

What are the three interrelated areas of finance?

What should be the long term focal point of financial management in a firm?

If an investor were to sell 100 shares of Microsoft stock to another investor in the securities market, this would be referred to as what type of transaction?

__________ is concerned with the acquisition, financing, and management of assets with some overall goal in mind?

___________________ are intermediaries, such as banks, insurance companies, and investment companies that engage in financial activities to aid the flow of funds from savers to borrowers or investors?

Among the pairs given below select a (n) example of a principal and a (n) example of an agent respectively?

In finance, we refer to the market where new securities are bought and sold for the first time?

Which of the following statements always apply to corporations?

Which of the following is the activity in which finance people are involved?

Financial decisions are concerned with which of the following?

Financing decision determines?

Which of the following is a money market instrument?

The purpose of financial markets is to?

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