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Financial Statement Analysis Multiple Choice Questions and Answers | Financial Statement Analysis MCQs Quiz

Free download in PDF Financial Statement Analysis Multiple Choice Questions and Answers for competitive exams. These short objective type questions with answers are very important for Board exams as well as competitive exams like UPSC, NDA, SSC etc. These short solved questions or quizzes are provided by Gkseries./p>

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(1) Agency cost consists of
[A] Binding
[B] Monitoring
[C] Opportunity and structure cost
[D] All of the above
Answer: All of the above
(2) Finance Function comprises
[A] Safe custody of funds only
[B] Expenditure of funds only
[C] Procurement of finance only
[D] Procurement & effective use of funds
Answer: Procurement & effective use of funds
(3) The objective of wealth maximization takes into account
[A] Amount of returns expected
[B] Timing of anticipated returns
[C] Risk associated with uncertainty of returns
[D] All of the above
Answer: All of the above
(4) Financial management mainly focuses on
[A] Efficient management of every business
[B] Brand dimension
[C] Arrangement of funds
[D] All elements of acquiring and using means of financial resources for financial activities
Answer: All elements of acquiring and using means of financial resources for financial activities
(5) Time value of money indicates that
[A] A unit of money obtained today is worth more than a unit of money obtained in future
[B] A unit of money obtained today is worth less than a unit of money obtained in future
[C] There is no difference in the value of money obtained today and tomorrow
[D] None of the above
Answer: A unit of money obtained today is worth more than a unit of money obtained in future
(6) Time value of money supports the comparison of cash flows recorded at different time period by
[A] Discounting all cash flows to a common point of time
[B] Compounding all cash flows to a common point of time
[C] Using either a or b
[D] None of the above.
Answer: Using either a or b
(7) If the nominal rate of interest is 10% per annum and there is quarterly compounding, the effective rate of interest will be:
[A] 10% per annum
[B] 10.10 per annum
[C] 10.25%per annum
[D] 10.38% per annum
Answer: 10.38% per annum
(8) Relationship between annual nominal rate of interest and annual effective rate of interest, if frequency of compounding is greater than one:
[A] Effective rate > Nominal rate
[B] Effective rate < Nominal rate
[C] Effective rate = Nominal rate
[D] None of the above
Answer: Effective rate > Nominal rate
(9) Mr. X takes a loan of Rs 50,000 from HDFC Bank. The rate of interest is 10% per annum. The first installment will be paid at the end of year 5. Determine the amount of equal annual installments if Mr. X wishes to repay the amount in five installments.
[A] Rs 19500
[B] Rs 19400
[C] Rs 19310
[D] None of the above
Answer: Rs 19310
(10) If nominal rate of return is 10% per annum and annual effective rate of interest is 10.25% per annum, determine the frequency of compounding:
[A] 1
[B] 2
[C] 3
[D] None of the above
Answer: 2
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