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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___________________ 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?

International financial organizations

Federal agencies

Financial market organizations

Financial Institutions

Correct! Wrong!

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

Marketing decisions

HR decisions

Investing decisions

Promotion decisions

Correct! Wrong!

Finance has its origins in?

Accounting and sociology

Economics and statistics

Accounting and economics

Psychology and mathematics

Correct! Wrong!

Which of the following is a depository financial institution?

A finance company

A pension fund

An investment bank

A savings bank

Correct! Wrong!

Which of the following statements always apply to corporations?

Mix of ownership and control

Single taxation

Limited life

Limited liability

Correct! Wrong!

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

The minimization of the amount of taxes paid by the firm

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

The profits earned by the firm

The creation of value for shareholders

Correct! Wrong!

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

Shareholder; manager

Manager; owner

Accountant; bondholder

Shareholder; bondholder

Correct! Wrong!

Which of the following is a money market instrument?

Treasury bill

Stocks

Corporate bonds

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 futures market transaction

A secondary market transaction

A money market transaction

It is primary market transaction

Correct! Wrong!

Financial decisions are concerned with which of the following?

All of given options

Making investment decisions that optimize economic value

Raising capital that is needed for growth

Making asset management decisions that optimize economic wealth

Correct! Wrong!

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

Accounting; Financial management

Financial management; Accounting

Financial management; Operations

Operational; Financial management

Correct! Wrong!

Finance is?

None of the above

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

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

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

Correct! Wrong!

Financing decision determines?

Current asset

Mix of finance

Equity

Fix asset

Correct! Wrong!

The Financial institutions makes it easier to trade because it?

Facilitate Payments

All of the given options

Channels Funds from Savers to Borrowers

Enables Risk Sharing

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!

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

Increase sales and profit

Maximize market share

Maximize the owners’ wealth

Have healthy cash flow

Correct! Wrong!

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

Financial management

Agency theory

Social responsibility

Profit maximization

Correct! Wrong!

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

Primary market

Money market

Capital market

Secondary market

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?

Financial environment

Regulatory environment

International environment

Operating environment

Correct! Wrong!

The purpose of financial markets is to?

Lower the yield on bonds

Increase the price of common stocks

Allocate savings efficiently

Control inflation

Correct! Wrong!

Introduction to Finance

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Introduction to Finance MCQs

Learning Objectives

MCQs 1 to 20

___________________ 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?

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

Finance has its origins in?

Which of the following is a depository financial institution?

Which of the following statements always apply to corporations?

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

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

Which of the following is a money market instrument?

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?

Financial decisions are concerned with which of the following?

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

Finance is?

Financing decision determines?

The Financial institutions makes it easier to trade because it?

What are the three interrelated areas of finance?

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

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

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

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

The purpose of financial markets is to?

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References

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