## Assistant Director Finance MCQs

These MCQs are starting from 91. To read the previous MCQs – Click Here.

92. The construction of a new manufacturing plant is also referred to as the

A Capital decision

B CFO decision

C Financing decision

D Investment decision

E. All of these

F. None of these

93. According to the Efficient Market Hypothesis, which from the following is NOT true?

A. The analysis predicts price pattern

B. No money machines

C. No arbitrage opportunities

D. All of these

E. None of these

94. According to the weak form of market efficiency __________ past information is included in the stock price.

A no

B all

C marginal

D only a few

E. All of these

F. None of these

95. We say about a particular investment that it is risky, because

A it is dangerous

B it has low returns

C its returns are uncertain

D its raw material is unavailable

E. All of these

F. None of these

96. In Finance, the risk is calculated by calculating the

A mean

B variance

C standard deviation

D kurtosis

E. All of these

F. None of these

99. The sale of bonds by a country or a corporation is referred to as the

A. Investment decision

B. financing decision

C. offering loan

D. capital structure

E.. All of these

F. None of these

100. A technique that is used in a comparative analysis of financial statement is

A .graphical analysis

B .preference analysis

C .common size analysis

D .returning analysis

E. All of these

F. None of these

101.Net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be

A. 0.00114

B. 0.114

C. 0.12 times

D. 0.12

E. All of these

F. None of these

102. Price per share is $30 and earnings per share are $3.5 then the price for earnings ratio would be

A. 8.57 times

B. 0.0857

C. 0.11 times

D. 0.11

E. All of these

F. None of these

103. Price per share is $25 and cash flow per share is $6 then price to cash flow ratio would be

A. 0.24 times

B. 4.16 times

C. 0.0416

D. 0.24

E. All of these

F. None of these

104. Low price for earnings ratio is a result of

A. low riskier firms

B. high riskier firms

C. low dividends paid

D. high marginal rate

E. All of these

F. None of these

105.what will be the return on assets if the Profit margin is 4.5%, assets turnover is 2.2 times, equity multiplier is 2.7 times?

A. 0.2673

B. 26.73 times

C. 0.094

D. 0.4 times

E. All of these

F. None of these

106. A formula such as net income available for common stockholders divided by total assets is used to calculate

A. return on total assets

B. return on total equity

C. return on debt

D. return on sales

E. All of these

F. None of these

107.Price per ratio is divided by cash flow per share ratio, is used for calculating

A. dividend to stock ratio

B. sales to growth ratio

C. cash flow to price ratio

D. price to cash flow ratio

E. All of these

F. None of these

108.Techniques which are used to identify financial statements trends include

A. common size analysis

B. percent change analysis

C. returning ratios analysis

D. Both A and B

E. All of these

F. None of these

109.Net income is to the stockholders is $150 and total assets are $2,100 then return on total assets would be___________

A. 0.0007

B. 0.0714

C. 0.05 times

D. 7.15 times

E. All of these

F. None of these

110.A project whose cash flows are more than the capital invested for the rate of return then the net present value will be

A. positive

B. independent

C. negative

D. zero

E. All of these

F. None of these

111.In mutually exclusive projects, a project which is selected for comparison with others must have

A. higher net present value

B. lower net present value

C. zero net present value

D. all of the above

E. All of these

F. None of these

112.Relationship between Economic Value Added (EVA) and Net Present Value (NPV) is considered as

A. valued relationship

B. economic relationship

C. direct relationship

D. inverse relationship

E. All of these

F. None of these

113.An uncovered cost at the start of the year is $200, full cash flow during recovery year is $400 and prior years to full recovery is 3 then payback would be

A. 5 years

B. 3.5 years

C. 4 years

D. 4.5 years

E. All of these

F. None of these

114.In capital budgeting, positive net present value results in

A. negative economic value added

B. positive economic value added

C. zero economic value added

D. percent economic value added

E. All of these

F. None of these

115.An uncovered cost at the start of the year is divided by full cash flow during recovery year then added in prior years to full recovery for calculating

A. original period

B. investment period

C. payback period

D. forecasted period

E. All of these

F. None of these

Answer

120. Second mortgages pledged against bond’s security are referred to as

A. loan mortgages

B. medium mortgages

C. senior mortgages

D. junior mortgages

E. All of these

F. None of these

121. The long period of bond maturity leads to

A. more price change

B. stable prices

C. standing prices

D. mature prices

E. All of these

F. None of these

122.If the coupon rate is equal to going rate of interest then the bond will be sold

A. at par value

B. below its par value

C. more than its par value

D. seasoned par value

E. All of these

F. None of these

123. Falling interest rate leads change to bondholder income which is__________?

A. reduction in income

B. increment in income

C. matured income

D. frequent income

E. All of these

F. None of these

124. Bonds issued by corporations and exposed to default risk are classified as

A. corporation bonds

B. default bonds

C. risk bonds

D. zero risk bonds

E. All of these

F. None of these

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