1. What is the primary purpose of financial statements?
A) To analyze market trends
B) To provide information for decision-making
C) To calculate tax liabilities
D) To report daily transactions
Answer: B) To provide information for decision-making
2. Which of the following is not a type of financial statement?
A) Balance Sheet
B) Income Statement
C) Cash Flow Statement
D) Marketing Analysis
Answer: D) Marketing Analysis
3. The formula for calculating Net Present Value (NPV) is:
A) Cash inflow – Cash outflow
B) Cash inflow / (1 + rate)^n
C) Total Revenue – Total Costs
D) Cash inflow – (Cash outflow / (1 + rate)^n)
Answer: D) Cash inflow – (Cash outflow / (1 + rate)^n)
4. Which ratio is used to measure a company’s profitability?
A) Current Ratio
B) Quick Ratio
C) Return on Assets (ROA)
D) Debt to Equity Ratio
Answer: C) Return on Assets (ROA)
5. The Capital Asset Pricing Model (CAPM) is used to determine:
A) The future value of an investment
B) The expected return on an asset based on its risk
C) The cost of equity
D) The market value of a company
Answer: B) The expected return on an asset based on its risk
6. Which of the following best describes liquidity?
A) The ability to pay long-term debts
B) The ability to convert assets into cash quickly
C) The profitability of a business
D) The level of debt a company has
Answer: B) The ability to convert assets into cash quickly
7. A bond’s coupon rate refers to:
A) The interest paid to bondholders
B) The total value of the bond
C) The current market price of the bond
D) The maturity date of the bond
Answer: A) The interest paid to bondholders
8. Which of the following is considered a non-current asset?
A) Cash
B) Inventory
C) Accounts Receivable
D) Property, Plant, and Equipment
Answer: D) Property, Plant, and Equipment
9. The market equilibrium price occurs when:
A) Demand exceeds supply
B) Supply exceeds demand
C) Quantity demanded equals quantity supplied
D) Prices are fixed
Answer: C) Quantity demanded equals quantity supplied
10. Which financial metric indicates a company’s ability to meet short-term obligations?
A) Return on Equity
B) Current Ratio
C) Gross Margin
D) Debt Ratio
Answer: B) Current Ratio
11. The main function of the stock market is to:
A) Determine interest rates
B) Facilitate the buying and selling of securities
C) Regulate banks
D) Provide loans
Answer: B) Facilitate the buying and selling of securities
12. Which type of business organization limits personal liability for its owners?
A) Sole Proprietorship
B) Partnership
C) Corporation
D) Limited Liability Company (LLC)
Answer: D) Limited Liability Company (LLC)
13. The term “dividend” refers to:
A) A payment made to shareholders
B) A measure of profitability
C) The total assets of a company
D) The cost of borrowing
Answer: A) A payment made to shareholders
14. Which of the following is an example of a fixed cost?
A) Direct materials
B) Sales commissions
C) Rent
D) Utilities
Answer: C) Rent
15. What does the acronym ‘FIFO’ stand for in inventory management?
A) First In, First Out
B) Fixed In, Fixed Out
C) Financial In, Financial Out
D) First In, Final Out
Answer: A) First In, First Out
16. Which principle states that expenses should be matched with revenues?
A) Revenue Recognition Principle
B) Matching Principle
C) Cost Principle
D) Conservatism Principle
Answer: B) Matching Principle
17. What is the primary goal of corporate finance?
A) Increasing market share
B) Maximizing shareholder value
C) Minimizing costs
D) Enhancing customer satisfaction
Answer: B) Maximizing shareholder value
18. A budget variance occurs when:
A) Actual results differ from budgeted amounts
B) A new budget is created
C) Expenses exceed revenues
D) All budget items are achieved
Answer: A) Actual results differ from budgeted amounts
19. In the context of investments, diversification refers to:
A) Investing in a single asset
B) Spreading investments across various assets
C) Avoiding risky investments
D) Selling off all investments
Answer: B) Spreading investments across various assets
20. Which financial metric helps in evaluating a company’s profitability in relation to its equity?
A) Return on Investment (ROI)
B) Return on Equity (ROE)
C) Gross Profit Margin
D) Operating Margin
Answer: B) Return on Equity (ROE)
General Ability Questions (20%)
21. Which is the largest desert in the world?
A) Gobi
B) Sahara
C) Arabian
D) Kalahari
Answer: B) Sahara
22. What is the capital of Pakistan?
A) Karachi
B) Lahore
C) Islamabad
D) Peshawar
Answer: C) Islamabad
23. Which of the following is not a programming language?
A) Python
B) HTML
C) Java
D) SQL
Answer: B) HTML
24. The boiling point of water is:
A) 0°C
B) 50°C
C) 100°C
D) 150°C
Answer: C) 100°C
25. What is the sum of angles in a triangle?
A) 90 degrees
B) 180 degrees
C) 270 degrees
D) 360 degrees
Answer: B) 180 degrees
26. Which planet is known as the Red Planet?
A) Venus
B) Mars
C) Jupiter
D) Saturn
Answer: B) Mars
27. Which is the hardest natural substance on Earth?
A) Gold
B) Iron
C) Diamond
D) Quartz
Answer: C) Diamond
28. Which instrument is used to measure atmospheric pressure?
A) Barometer
B) Thermometer
C) Anemometer
D) Hydrometer
Answer: A) Barometer
29. In which year did Pakistan become independent?
A) 1945
B) 1947
C) 1950
D) 1952
Answer: B) 1947
30. Which of the following is a mammal?
A) Crocodile
B) Sparrow
C) Whale
D) Lizard
Answer: C) Whale
31. Who wrote the famous play ‘Romeo and Juliet’?
A) Mark Twain
B) Charles Dickens
C) William Shakespeare
D) Leo Tolstoy
Answer: C) William Shakespeare
32. What is the currency of Japan?
A) Dollar
B) Yen
C) Euro
D) Won
Answer: B) Yen
33. The Great Wall of China was primarily built for:
A) Trade
B) Tourism
C) Defense
D) Transportation
Answer: C) Defense
34. Which gas do plants absorb from the atmosphere during photosynthesis?
A) Oxygen
B) Nitrogen
C) Carbon Dioxide
D) Hydrogen
Answer: C) Carbon Dioxide
35. The human body has how many bones?
A) 206
B) 205
C) 201
D) 210
Answer: A) 206
36. Which element has the chemical symbol ‘O’?
A) Gold
B) Oxygen
C) Osmium
D) Oganesson
Answer: B) Oxygen
37. Which continent is known as the “Dark Continent”?
A) Asia
B) Africa
C) Australia
D) South America
Answer: B) Africa
38. In which part of the brain is the control center for coordination located?
A) Cerebrum
B) Cerebellum
C) Medulla
D) Hypothalamus
Answer: B) Cerebellum
39. Which country is known as the Land of the Rising Sun?
A) China
B) Japan
C) Korea
D) Thailand
Answer: B) Japan
40. The speed of light is approximately:
A) 300,000 km/s
B) 150,000 km/s
C) 450,000 km/s
D) 600,000 km/s
Answer: A) 300,000 km/s
41. What is the freezing point of water?
A) 0°F
B) 0°C
C) 32°F
D) Both B and C
Answer: D) Both B and C
42. Which of the following is a primary color?
A) Green
B) Purple
C) Yellow
D) Orange
Answer: C) Yellow
43. The main ingredient in guacamole is:
A) Tomato
B) Avocado
C) Onion
D) Pepper
Answer: B) Avocado
44. Which organ is primarily responsible for detoxifying chemicals in the body?
A) Kidney
B) Heart
C) Liver
D) Lung
Answer: C) Liver
45. Which gas is essential for human respiration?
A) Carbon Dioxide
B) Nitrogen
C) Oxygen
D) Methane
Answer: C) Oxygen
46. What is the capital city of France?
A) London
B) Madrid
C) Paris
D) Rome
Answer: C) Paris
47. The smallest planet in our solar system is:
A) Venus
B) Mars
C) Mercury
D) Earth
Answer: C) Mercury
48. Which organelle is known as the powerhouse of the cell?
A) Nucleus
B) Ribosome
C) Mitochondria
D) Endoplasmic Reticulum
Answer: C) Mitochondria
49. Which famous scientist developed the theory of general relativity?
A) Isaac Newton
B) Albert Einstein
C) Galileo Galilei
D) Nikola Tesla
Answer: B) Albert Einstein
50. What is the chemical formula for water?
A) CO2
B) H2O
C) O2
D) NaCl
Answer: B) H2O
Continuation of Qualification-Related Questions (51-100)
51. Which of the following is not a form of business financing?
A) Debt Financing
B) Equity Financing
C) Retained Earnings
D) Advertising
Answer: D) Advertising
52. Which investment strategy involves buying low and selling high?
A) Hedging
B) Arbitrage
C) Value Investing
D) Growth Investing
Answer: C) Value Investing
53. Which financial document summarizes a company’s revenues and expenses?
A) Cash Flow Statement
B) Balance Sheet
C) Income Statement
D) Shareholder Equity Statement
Answer: C) Income Statement
54. Which term describes a situation where total revenues equal total costs?
A) Profit
B) Loss
C) Break-even
D) Surplus
Answer: C) Break-even
55. The term “leverage” refers to:
A) The ratio of debt to equity
B) The use of borrowed funds to increase returns
C) The process of reducing costs
D) The level of investment in securities
Answer: B) The use of borrowed funds to increase returns
56. Which of the following is a benefit of diversification?
A) Increased risk
B) Reduced volatility
C) Higher returns
D) Higher costs
Answer: B) Reduced volatility
57. A company’s ability to pay its long-term debts is assessed through which ratio?
A) Current Ratio
B) Quick Ratio
C) Debt Ratio
D) Asset Turnover Ratio
Answer: C) Debt Ratio
58. In accounting, “accrual” refers to:
A) Recognizing revenue when cash is received
B) Recognizing expenses when paid
C) Recognizing revenue and expenses when incurred
D) None of the above
Answer: C) Recognizing revenue and expenses when incurred
59. Which investment product typically offers fixed interest payments?
A) Stocks
B) Mutual Funds
C) Bonds
D) Real Estate
Answer: C) Bonds
60. A SWOT analysis includes:
A) Strengths, Weaknesses, Opportunities, Threats
B) Strengths, Weaknesses, Objectives, Tactics
C) Strategies, Wages, Outcomes, Trends
D) None of the above
Answer: A) Strengths, Weaknesses, Opportunities, Threats
61. What does ‘ROI’ stand for in business?
A) Return on Investment
B) Rate of Interest
C) Revenue of Income
D) Return of Investment
Answer: A) Return on Investment
62. Which of the following represents a fixed asset?
A) Cash
B) Inventory
C) Building
D) Accounts Receivable
Answer: C) Building
63. Which financial metric is used to assess a company’s operational efficiency?
A) Gross Profit Margin
B) Net Profit Margin
C) Operating Margin
D) Return on Assets
Answer: C) Operating Margin
64. Which financial document is used to report a company’s cash inflows and outflows?
A) Income Statement
B) Cash Flow Statement
C) Balance Sheet
D) Shareholders’ Equity Statement
Answer: B) Cash Flow Statement
65. Which of the following is an example of a variable cost?
A) Rent
B) Salaries
C) Raw Materials
D) Insurance
Answer: C) Raw Materials
66. The primary objective of marketing is to:
A) Increase production
B) Maximize profit
C) Satisfy customer needs
D) Reduce costs
Answer: C) Satisfy customer needs
67. Which type of market structure is characterized by a single seller?
A) Perfect Competition
B) Monopoly
C) Oligopoly
D) Monopolistic Competition
Answer: B) Monopoly
68. Which of the following is not a source of external financing?
A) Bank Loans
B) Issuing Stock
C) Retained Earnings
D) Bonds
Answer: C) Retained Earnings
69. What is the main purpose of market research?
A) To analyze financial statements
B) To understand consumer behavior
C) To manage employee relations
D) To create products
Answer: B) To understand consumer behavior
70. Which economic term describes a prolonged period of negative growth?
A) Recession
B) Expansion
C) Boom
D) Stagnation
Answer: A) Recession
71. In financial analysis, liquidity ratios measure:
A) Profitability
B) Solvency
C) Cash flow
D) Ability to meet short-term obligations
Answer: D) Ability to meet short-term obligations
72. Which of the following is a characteristic of an oligopoly?
A) Many sellers and buyers
B) Homogeneous products
C) High barriers to entry
D) Perfect information
Answer: C) High barriers to entry
73. What is the primary purpose of an income statement?
A) To show cash inflows and outflows
B) To report the company’s financial position at a point in time
C) To summarize revenues and expenses over a period
D) To report retained earnings
Answer: C) To summarize revenues and expenses over a period
74. A company’s market share is defined as:
A) The percentage of total sales in the market
B) The number of customers
C) The total profit earned
D) The total number of competitors
Answer: A) The percentage of total sales in the market
75. Which of the following is a type of equity financing?
A) Bank Loan
B) Issuing Bonds
C) Issuing Common Stock
D) Line of Credit
Answer: C) Issuing Common Stock
76. Which of the following is a benefit of using credit?
A) Higher costs
B) Increased debt
C) Improved cash flow
D) Reduced purchasing power
Answer: C) Improved cash flow
77. The term “bull market” refers to:
A) A declining market
B) A rising market
C) A stable market
D) A volatile market
Answer: B) A rising market
78. Which of the following is a characteristic of a sole proprietorship?
A) Limited liability
B) Shared ownership
C) Single ownership
D) Separate legal entity
Answer: C) Single ownership
79. In project management, the critical path method is used to:
A) Determine project budget
B) Identify the shortest path to complete a project
C) Allocate resources
D) Set project milestones
Answer: B) Identify the shortest path to complete a project
80. Which of the following is a direct cost?
A) Office Rent
B) Utilities
C) Raw Materials
D) Marketing Expenses
Answer: C) Raw Materials
81. Which financial ratio measures a company’s profitability?
A) Current Ratio
B) Debt-to-Equity Ratio
C) Return on Equity
D) Quick Ratio
Answer: C) Return on Equity
82. Which of the following is a type of intangible asset?
A) Cash
B) Equipment
C) Brand Recognition
D) Inventory
Answer: C) Brand Recognition
83. Which term describes the total value of a company’s outstanding shares?
A) Market Capitalization
B) Net Worth
C) Equity Value
D) Book Value
Answer: A) Market Capitalization
84. Which financial statement shows a company’s assets, liabilities, and equity?
A) Income Statement
B) Cash Flow Statement
C) Balance Sheet
D) Statement of Changes in Equity
Answer: C) Balance Sheet
85. In economics, a “substitute good” is:
A) A good that is used together with another
B) A good that can replace another
C) A luxury item
D) An essential item
Answer: B) A good that can replace another
86. Which type of analysis assesses the costs and benefits of a project?
A) Financial Analysis
B) Risk Analysis
C) Cost-Benefit Analysis
D) Market Analysis
Answer: C) Cost-Benefit Analysis
87. What does the term ‘fiscal policy’ refer to?
A) Government spending and taxation decisions
B) Monetary supply adjustments
C) Regulatory practices
D) Trade agreements
Answer: A) Government spending and taxation decisions
88. Which of the following is a leading economic indicator?
A) Employment Rates
B) GDP Growth
C) Stock Market Performance
D) Inflation Rate
Answer: C) Stock Market Performance
89. The main function of the Federal Reserve is to:
A) Regulate stock markets
B) Control inflation
C) Provide loans to businesses
D) Manage fiscal policy
Answer: B) Control inflation
90. Which of the following factors is typically considered in a credit risk assessment?
A) Payment History
B) Social Media Activity
C) Personal Interests
D) Physical Appearance
Answer: A) Payment History
91. Which of the following is a characteristic of a corporate bond?
A) No maturity date
B) Fixed interest payments
C) No default risk
D) Variable interest payments
Answer: B) Fixed interest payments
92. Which term describes the risk of losing all or part of an investment?
A) Systematic Risk
B) Unsystematic Risk
C) Market Risk
D) Credit Risk
Answer: B) Unsystematic Risk
93. Which of the following is a non-renewable resource?
A) Solar Energy
B) Wind Energy
C) Coal
D) Hydropower
Answer: C) Coal
94. Which term refers to the value of a company’s liabilities compared to its assets?
A) Equity Ratio
B) Debt Ratio
C) Solvency Ratio
D) Profitability Ratio
Answer: B) Debt Ratio
95. In which market do securities are bought and sold after they are issued?
A) Primary Market
B) Secondary Market
C) Tertiary Market
D) Capital Market
Answer: B) Secondary Market
96. Which of the following is a type of direct financing?
A) Bank Loans
B) Issuing Stocks
C) Issuing Bonds
D) All of the above
Answer: D) All of the above
97. Which of the following is an example of a fixed cost?
A) Direct Materials
B) Direct Labor
C) Rent
D) Commissions
Answer: C) Rent
98. The primary goal of a non-profit organization is to:
A) Maximize profits
B) Provide services to the community
C) Increase shareholder value
D) Reduce costs
Answer: B) Provide services to the community
99. Which of the following financial statements is prepared at a specific point in time?
A) Income Statement
B) Cash Flow Statement
C) Balance Sheet
D) Statement of Changes in Equity
Answer: C) Balance Sheet
100. Which term describes the potential financial gain from an investment?
A) Profit
B) Revenue
C) Return
D) Income
Answer: C) Return