Corporate Finance MCQs

Corporate Finance MCQs Page-6. The following MCQs are from the theory of Finance, that is Public Finance, Corporate Finance and Personal Finance. View answers to the questions at the bottom of the page.

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  1. If two firms in the same line of business merge together, it is called __________ merger.

    1. horizontal
    2. vertical
    3. straight
    4. conglomerate

  2. If two firms at different stages of production merge together, it is called __________ merger.

    1. horizontal
    2. vertical
    3. straight
    4. conglomerate

  3. If two firms in unrelated line of business merge together, it is called __________ merger.

    1. horizontal
    2. vertical
    3. straight
    4. conglomerate

  4. The measure for calculating how much two random variable change together is called

    1. variance
    2. covariance
    3. skewness
    4. kurtosis

  5. The normalized version of covariance is called
    1. regression
    2. correlation
    3. cross-section
    4. spread

  6. Suppose our portfolio consists of two stocks A and B. What should be the correlation between them so that we have no risk in our portfolio?

    1. -1
    2. 0
    3. 1
    4. risk cannot be eliminated

  7. In the beginning, some companies receive equity investment from wealthy individuals. The wealthy individuals are called

    1. angel investors
    2. corporate investors
    3. venture capitalists
    4. venture capital firms

  8. Firms that invest in new companies as they try to grow are called
    1. spinning
    2. underwriters
    3. venture capitalists
    4. venture capital firms

  9. An investor will receive $5,000 and $10,000 after one and two years from today respectively. If the interest rate during this period is 10% then what is the present value of this cash flow?

    1. $12000
    2. $12450
    3. $12810
    4. $13705

  10. What is volatility if the duration of a bond is 4 years and yield to maturity is 8%?

    1. 3.1%
    2. 3.4%
    3. 3.7%
    4. 4.0%

ANSWERS: CORPORATE FINANCE MCQS

  1. A
  2. B
  3. D
  4. B
  5. B
  6. A
  7. A
  8. D
  9. C
  10. C