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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Finance is?

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

None of the above

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

Correct! Wrong!

Which of the following is a money market instrument?

Treasury bill

Stocks

Corporate bonds

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!

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

Shareholder; bondholder

Accountant; bondholder

Manager; owner

Shareholder; manager

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

It is primary market transaction

A secondary market transaction

A money market transaction

Correct! Wrong!

The Financial institutions makes it easier to trade because it?

Channels Funds from Savers to Borrowers

Facilitate Payments

All of the given options

Enables Risk Sharing

Correct! Wrong!

Financial decisions are concerned with which of the following?

Making investment decisions that optimize economic value

Raising capital that is needed for growth

Making asset management decisions that optimize economic wealth

All of given options

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?

International financial organizations

Financial Institutions

Financial market organizations

Federal agencies

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?

Regulatory environment

Operating environment

Financial environment

International environment

Correct! Wrong!

What are the three interrelated areas of finance?

All of given options

Financial markets, option and forwards

Banking, financial institutions and swap currency

Investment, Financial management and Financial market & Financial institution

Correct! Wrong!

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

Accounting; Financial management

Operational; Financial management

Financial management; Accounting

Financial management; Operations

Correct! Wrong!

Financing decision determines?

Current asset

Mix of finance

Equity

Fix asset

Correct! Wrong!

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

Maximize market share

Maximize the owners’ wealth

Have healthy cash flow

Increase sales and profit

Correct! Wrong!

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

Profit maximization

Agency theory

Social responsibility

Financial management

Correct! Wrong!

Finance has its origins in?

Psychology and mathematics

Accounting and sociology

Economics and statistics

Accounting and economics

Correct! Wrong!

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

Investing decisions

HR decisions

Marketing decisions

Promotion decisions

Correct! Wrong!

Which of the following is a depository financial institution?

An investment bank

A finance company

A savings bank

A pension fund

Correct! Wrong!

The purpose of financial markets is to?

Allocate savings efficiently

Lower the yield on bonds

Control inflation

Increase the price of common stocks

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 profits earned by the firm

The minimization of the amount of taxes paid by the firm

Correct! Wrong!

Which of the following statements always apply to corporations?

Single taxation

Limited life

Limited liability

Mix of ownership and control

Correct! Wrong!

Introduction to Finance

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Introduction to Finance MCQs

Learning Objectives

MCQs 1 to 20

Finance is?

Which of the following is a money market instrument?

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

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

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?

The Financial institutions makes it easier to trade because it?

Financial decisions are concerned with which of the following?

___________________ 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?

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?

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

Financing decision determines?

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?

Finance has its origins in?

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

Which of the following is a depository financial institution?

The purpose of financial markets is to?

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

Which of the following statements always apply to corporations?

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