CBES Board Class 11 MCQ Quiz Hub

1. ___is the lifeblood of a business.
Finance Manager
Finance
Financial Management
Corporate Financial Management

2. Shareholder wealth” in a firm is represented by___
The number of people employed in the firm.
The book value of the firm’s assets less the book value of its liabilities.
The amount of salary paid to its employees
The market price per share of the firm’s common stock.

3. Financial Management is study – Of the process of procuring and judicious use of financial resources Undertaken to maximize the value of the firm/owners. Select the correct answer from the options given below.
(I) only
(II) only
Both (I) and (II)
Neither (I) nor (II)

4. To increase a given present value, the discount rate should be adjusted –
Upward
Downward
Keep as it is
None of the above

5. Financial Management is concerned with___
Investment Decisions
Finance Decisions
Dividend Decisions
All of the above

6. Procurement of funds inter alia includes___ (a) Identification of sources of finance (b) Determination of finance mix (c) Raising of funds (d) Division of profits between dividends and retention of profits of internal funds generation Select the correct answer from the options given below.
(a) & (b)
(a), (c) & (d)
(b) & (c)
(c), (a), (d) & (b)

7. The market price of a share of common stock is determined by:
The board of directors of the firm
The stock exchange on which the stock is listed.
The president of the company.
Individuals buying and selling the stock.

8. Which of the following is/are the basic aspects of financial management? (1) Procurement of funds. (2) Appointment of capable financial personnel. (3) Effective use of funds to achieve business objectives. (4) Increase the national resources. Select the correct answer from the options given below.
(1) & (3)
(2) & (4)
(1) & (4)
(2) & (3)

9. The focal point of financial management in a firm is____
The number and types of products or services provided by the firm.
The minimization of the amount of taxes paid by the firm.
The creation of value for shareholders
The profits earned by the firm.

10. A business organization can obtain funds from –
Issue of preference or equity share capital
Issue of debentures
Loan from banks and financial institution
All of the above

11. The decision function of financial management can be broken down into decisions.
Financing and investment
Investment, financing & asset management
Financing and dividend
Capital budgeting, cash management & credit management

12. Statement (I): Since funds can be obtained from different sources, therefore, their procurement is always considered a complex problem by business concerns. Statement (II): Funds produced from different sources have different characteristics in terms of risk, cost, and control. Select the correct answer from the options given below.
Statement I is correct but Statement II is incorrect.
Statement II is correct but Statement I is incorrect.
Statement I & Statement II both are correct and Statement II support Statement I.
Statement I & Statement II both are incorrect.

13. The funds raised by the issue of____are the best from the risk point of view for the company.
equity shares
debentures
both (A) & (B)
none of the above

14. Financial management is –
Science
Art
Both
None

15. A 30-year bond issued by Reliance Ltd. in 2007 would now trade in the –
Primary money market
Secondary money market
Primary capital market
Secondary capital market

16. Which of the following is not a function of a finance manager?
Investor relations
Credit & collections
Investments
Appointment of financial personnel

17. Money market mutual funds –
Are also known as finance companies
Enable individuals and small businesses to invest indirectly in money-market instruments.
Are available only to high net-worth individuals.
Are involved in acquiring and placing mortgages.

18. The purpose of financial markets is to:
Increase the price of common stocks
Lower the yield on bonds
Allocate savings efficiently
Control inflation

19. Investment decisions are concerned with –
Efficient allocation of funds to specific assets
Determining the proper amount of funds to be employed in the firm.
Determining the composition of liabilities
Short-run projects

20. ___ensures that the firm utilizes its available resources most efficiently under conditions of competitive markets.
Wealth Maximization
Profit Maximization
Value Maximization
Relation Maximization

21. For which of the following reason(s) profit maximization concept is criticized – 1. It is vague conceptually. 2. It ignores the timing of returns. 3. It ignores the risk factor 4. Its emphasis is generally on short-run projects. Select the correct answer from the options given below.
1
1 & 2
1, 2 & 3
1,2, 3 &4

22. _____consistent with the object of maximizing the owner’s economic welfare.
Profit Maximization
Wealth Maximization
Relation Maximization
All of the above

23. FinancialManagementis concerned with –
Profit Maximization
Both (A) & (C)
Wealth Maximization
Both (A) & (C) plus Relation Maximization

24. Assertion (A): Profit maximization as an objective does not take into account the time pattern of returns. Reason (R): The finance managers will accept highly risky proposals if they give high profits by applying the profit maximization concept. Select the correct answer from the options given below.
Both A and R are true and R is the correct explanation of A.
Both A and R are true but R is not a correct explanation of A.
A is true but R is false
A is false but R is true

25. Profit maximization –
Cannot be the sole objective of a company
Is at best a limited objective
Has to be attempted with a realization of risks involved
All of the above

26. Profit maximization –
Cannot be the sole objective of a company
Is at best a limited objective.
Has to be attempted with a realization of risks involved
All of the above

27. Under inflationary conditions, the value of money expressed in terms of its purchasing power over goods and services
Incline
Declines
Increases
Remains constant

28. ___is a condition where a company cannot meet or has difficulty paying off, its financial obligations to its creditors, typically due to high fixed costs, illiquid assets, or revenues sensitive to economic downturns.
Financial risk
Financial uncertainty
Financial certainty
Financial distress

29. ___means the organization can no longer meet its financial obligations with its lender or lenders as debts become due.
Financial certainty
Financial insolvency
Financial risk
Identified risk

30. Assertion (A): Profit maximization, as an objective is too narrow. Reason (R): It ignores the timing of returns and also fails to take into account the social considerations as also the obligations to various interests of workers, consumers, society, ethical trade practices.
Both A and R are true and R is the correct explanation of A.
Both A and R are true but R is not the correct explanation of A
A is true but R is false
A is false but R is true

31. A permanent_____may lead an organization to the chaotic state
Financial insolvency; financial certainty
Financial distress; Identified risk
Identified risk; financial insolvency
Financial distress; financial insolvency

32. Using _in the capital structure of a company is called financial gearing.
Borrowed funds or fixed cost funds
Owners funds or fixed cost funds
Owners funds
Reserve or balance of profit & loss account

33. High financial gearing will___
Decrease the EPS of the company if earnings before interest and taxes are rising
Increase the EPS of the company if earnings before interest and taxes are declining
Decrease the EPS of the company if earnings before interest and taxes are declining
Increase the EPS of the company if earnings before interest and taxes are rising

34. Higher the level of financial gearing___
Greater will be the risk.
Lower will be the risk
Risk will be constant.
None of the above

35. Financial management is broadly concerned with___
Raising of funds
Creating value to the assets of the business enterprise
Efficient allocation of funds
All of the above

36. Financial Management can be judged by the study of the nature of___
Corporate, social & benefit decisions.
Accounting, financing & dividend decisions.
Personnel, human cost & economic decisions
Investment, financing & dividend decisions.