Finance Quizzes

Finance Quizzes Page-3. 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 mixture of debt and equity, used to finance a corporation is also known as
    1. capital structure
    2. capital budgeting
    3. investing
    4. treasury

  2. The present value of $100 expected in two years from today at a discount rate of 5% is
    1. $105
    2. $110.7
    3. $95
    4. $90.7

  3. What will be value of $100 after two years, if the interest rate during this period is 5%?
    1. $105
    2. $107.5
    3. $110.25
    4. $95

  4. Investors require higher return on
    1. levered equity
    2. unlevered equity
    3. both levered and unlevered
    4. bond equity

  5. In a well-functioning capital market if the firm pays no taxes then what is better about borrowing?
    1. Borrowing is not a good idea in this case
    2. No difference who (firm or shareholders) borrows
    3. It is better that the firm borrows
    4. It is better that the shareholders borrow

  6. Corporations can return cash to their shareholders by
    1. paying cash dividends
    2. stock repurchase
    3. both A and B
    4. none of these

  7. Which from the following is true about stock repurchases?
    1. Repurchases are more flexible
    2. Repurchases are tax-advantaged
    3. both A and B
    4. none of these

  8. What should be the goal of a corporation?
    1. to maximize the profit of the shareholders
    2. to maximize the value of the corporation
    3. both A and B
    4. to take care of the interests of the management

  9. The money a investor receive for taking on a risk is called
    1. risk premium
    2. risk free rate
    3. option value
    4. arbitrage

  10. An asset that pays a fixed amount of cash each year for a specified number of years is called
    1. perpetuity
    2. dividend
    3. liquidity
    4. annuity

ANSWERS: FINANCE QUIZZES

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