Overview Of Financial Management(Financial Management And Financial Markets ) Questions and Answers

Question 1. A technique that is used in comparative analysis of financial statement is
  1.    graphical analysis
  2.    preference analysis
  3.    common size analysis
  4.    returning analysis
Explanation:-
Answer: Option C. -> common size analysis
Answer: (c).common size analysis
Question 2. The price per share is $25 and the cash flow per share is $6 then the price to cash flow ratio would be
  1.    0.24 times
  2.    4.16 times
  3.    0.0416
  4.    0.24
Explanation:-
Answer: Option B. -> 4.16 times
Answer: (b).4.16 times
Question 3. The low price for earnings ratio is the result of
  1.    low riskier firms
  2.    high riskier firms
  3.    low dividends paid
  4.    high marginal rate
Explanation:-
Answer: Option A. -> low riskier firms
Answer: (a).low riskier firms
Question 4. The price per share is $30 and earnings per share is $3.5 then price for earnings ratio would be
  1.    8.57 times
  2.    0.0857
  3.    0.11 times
  4.    0.11
Explanation:-
Answer: Option A. -> 8.57 times
Answer: (a).8.57 times
Question 5. The net income available to stockholders is $125 and total assets are $1,096 then return on common equity would be
  1.    0.00114
  2.    0.114
  3.    0.12 times
  4.    0.12
Explanation:-
Answer: Option B. -> 0.114
Answer: (b).0.114
Question 6. The partners who are only liable for their own part of investment are considered as
  1.    venture partners
  2.    corporate partners
  3.    limited partners
  4.    general partners
Explanation:-
Answer: Option C. -> limited partners
Answer: (c).limited partners
Question 7. The legal entity separation from its legal owners and managers with the help of state laws is classified as
  1.    controlled corporate business
  2.    corporation
  3.    limited corporate business
  4.    unlimited corporate business
Explanation:-
Answer: Option B. -> corporation
Answer: (b).corporation
Question 8. The process of selling company stock at large to the general public and get lending from banks is classified as an
  1.    initial public offering
  2.    external public offering
  3.    internal public offering
  4.    unprofessional offering
Explanation:-
Answer: Option A. -> initial public offering
Answer: (a).initial public offering
Question 9. The sales revenue $90,000, operating taxes $30,000 and operating capital $15,000 then value of free cash flows (in USD) will be
  1.    45000
  2.    13500
  3.    65000
  4.    75000
Explanation:-
Answer: Option A. -> 45000
Answer: (a).45000
Question 10. The markets which bring closer the institutions needing funds and with the surplus funds are classified as
  1.    financial markets
  2.    corporate institutions
  3.    hedge firms
  4.    retirement planners
Explanation:-
Answer: Option A. -> financial markets
Answer: (a).financial markets
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