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.

865. A growth industry is defined as ____________.

by
an industry with 15% rate of growth per annum
an industry where demand for its product is growing
an industry with high capital investment
an industry with average growth higher than the growth of the economy
✅ The correct answer is D.
A growth industry is defined as an industry with average growth higher than the growth of the economy. A growth industry is that sector of an economy which experiences a higher-than-average growth rate as compared to other sectors. Growth industries are often new or pioneer industries that did not exist in the past. Their growth is a result of demand for new products or services offered by companies in the field.

866. If stock market price is higher than strike price so call option

by
price will be lower
rate will be higher
price will be higher
rate will be lower
✅ The correct answer is C.
If stock market price is higher than strike price so call option price will be higher. A stock market, equity market or share market is the aggregation of buyers and sellers of stocks, which represent ownership claims on businesses; these may include securities listed on a public stock exchange, as well as stock that is only traded privately.

867. Weighted average of probabilities is classified as

by
average rate of return
expected rate of return
past rate of return
weighted rate of return
✅ The correct answer is B.
Weighted average of probabilities is classified as expected rate of return. The expected return on a financial investment is the expected value of its return. It is a measure of the center of the distribution of the random variable that is the return.

868. Maturity date decides at time of issuance of bond and legally permissible is classified as

by
original maturity
permanent maturity
artificial maturity
valued maturity
✅ The correct answer is A.
Maturity date decides at time of issuance of bond and legally permissible is classified as original maturity. The “original maturity” is the time between the issue date and the maturity date. This date is included in a bond’s indenture at the time of issuance. An investor that purchases a bond on its issuance date will be quoted the original maturity.