Finance MCQs

Finance MCQs Page-5. The following Multiple Choice Questions (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. The contribution of an individual security to the risk of a well-diversified portfolio is measured by?

    1. beta
    2. variance
    3. standard deviation
    4. CAPM

  2. The sensitivity of an asset to the market movements is called
    1. beta
    2. variance
    3. standard deviation
    4. CAPM

  3. The average beta of all stocks in a market is
    1. -1
    2. 0
    3. 1
    4. 1.5

  4. If the daily prices of a stock on 20 and 21 January are 90 and 100 respectively, then what is the daily rate of return?

    1. 9.9%
    2. 10.10%
    3. 11.11%
    4. 12.12%

  5. According to the MM proposition, dividend policy is
    1. correlated
    2. underperformed
    3. relevant
    4. irrelevant

  6. In portfolio analysis __________ curves play an important role.
    1. circle
    2. ellipse
    3. parabola
    4. hyperbola

  7. If stock prices increases, dividend yield
    1. also increases
    2. decreases
    3. remains same
    4. increases to one and a half

  8. According to residual dividend policy, a firm should pay a dividend of all left over when

    1. zero NPV projects have been funded
    2. positive NPV projects have been funded
    3. projects with IRR equal to risk-free interest rate have been funded
    4. projects with IRR greater than risk-free interest rate have been funded

  9. The value of probability is always between __________ (inclusive).
    1. -1 and 0
    2. 0 and 1
    3. -1 and 1
    4. none of these

  10. The value of correlation is always between __________ (inclusive).
    1. -1 and 0
    2. 0 and 1
    3. -1 and 1
    4. none of these

ANSWERS: FINANCE MCQS

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