Financial Management
Financial Management MCQs with Answers and Explanations | Corporate Finance & Investment Objective Questions
Master the core concepts of Financial Management with our comprehensive set of MCQs with answers and detailed explanations. Covering topics such as time value of money, capital budgeting, cost of capital, working capital management, capital structure, dividend policy, risk and return, portfolio management, and financial planning, these questions are ideal for students, teachers, and candidates preparing for professional and competitive exams (CA, ACCA, ICMA, CFA, MBA, BBA, CSS, PMS, NTS, FPSC, PPSC, UPSC, etc.). Each MCQ is followed by a clear explanation to build strong concepts, sharpen decision-making skills, and enhance exam readiness. Perfect for practice, revision, and self-assessment in the field of Financial Management and Corporate Finance.
NASAQ
JASAQ
NASDAQ& JASDAQ
NSE
✅ The correct answer is C.
Over the counter exchange of India was started in 1992 after the role models of NASDAQ(national association of securities dealers automated quotation) and JASDAQ.
remains same
becomes stable
becomes change
becomes low
✅ The correct answer is A.
book value of share
market value of shares
earning per share
dividends per share
✅ The correct answer is A.
Total common equity divided by common shares outstanding which is used to calculate book value of share. The book value per share formula is used to calculate the per share value of a company based on its equity available to common shareholders.
market efficiency
semi strong efficiency
weak form efficiency
strong form efficiency
✅ The correct answer is C.
Information which is reflected in current market prices with help of past price movements is classified as weak form efficiency. Weak form efficiency states that past prices, historical values and trends can’t predict future prices. Weak form efficiency is an element of efficient market hypothesis. Weak form efficiency states that stock prices reflect all current information.
comparison
analysis
benchmarking
return analysis
✅ The correct answer is C.
Process of comparing company results with other leading firms is considered as benchmarking. Benchmarking is a process of measuring the performance of a company’s products, services, or processes against those of another business considered to be the best in the industry, aka “best in class.”
whole call provision
super fund provision
floating fund provision
sinking fund provision
✅ The correct answer is D.
Type of provision which allows an orderly retirement of an issued bond which is classified as sinking fund provision. A sinking fund is a fund established by an economic entity by setting aside revenue over a period of time to fund a future capital expense, or repayment of a long-term debt.
retirement funds
pension funds
future funds
workers funds
✅ The correct answer is B.
A retirement plans funded for workers by corporations, administered and commercial banks are classified as pension funds. Pension funds are pooled monetary contributions from pension plans set up by employers, unions, or other organizations to provide for their employees’ or members’ retirement benefits.
negative correlation
multiple correlation
divisor correlation
none of above
✅ The correct answer is A.
An opposite of perfect positive correlation + 1.0 is called negative correlation. Negative correlation is a relationship between two variables in which one variable increases as the other decreases, and vice versa.
super refund provision
super put redemption
make-whole call provision
super call provision
✅ The correct answer is C.
Call provision practiced by company which states that call price will be paid is classified as make-whole call provision. A make whole call (provision) is a type of call provision on a bond allowing the borrower to pay off remaining debt early.
larger
lower
no change
fixed
✅ The correct answer is A.
Greater the size of a business unit larger will be the requirements of working capital. Working capital, also known as net working capital (NWC), is the difference between a company’s current assets, such as cash, accounts receivable (customers’ unpaid bills) and inventories of raw materials and finished goods, and its current liabilities, such as accounts payable.