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This section includes InterviewSolutions, each offering curated multiple-choice questions to sharpen your knowledge and support exam preparation. Choose a topic below to get started.
| 7101. |
You are considering two mutually exclusive investment proposals, project A and project B. B's expected value of net present value is $1,000 less than that for A and A has less dispersion. On the basis of risk and return, you would say that a) Project A dominates project B. b) Project B dominates project A. c) Project A is more risky and should offer greater expected value. d) Each project is high on one variable, so the two are basically equal. |
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Answer» a) Project A dominates project B. |
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| 7102. |
The addition of all current assets investment is known as... a. Net Working Capital b. Gross Working capital c. Temporary Working Capital d. All of these |
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Answer» b. Gross Working capital |
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| 7103. |
Proprietary ratio is calculated by a. Total assets/Total outside liability b. Total outside liability/Total tangible assets c. Fixed assets/Long term source of fund d. Proprietors/Funds/Total |
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Answer» d. Proprietors/Funds/Total |
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| 7104. |
To increase a given present value, the discount rate should be adjusted a) upward. b) downward. c) No change. d) constant |
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Answer» b) downward. |
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| 7105. |
Authorised capital of a company is Rs.5 lac, 40% of it is paid up. Loss incurred during the year is Rs.50,000. Accumulated loss carried from last year is Rs.2 lac. The company has a Tangible Net Worth of a. Nil b. Rs.2.50 lac c. (-)Rs.50,000 d. Rs.1 lac. |
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Answer» c. (-)Rs.50,000 |
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| 7106. |
When total current assets exceeds total current liabilities it refers to. a. Gross Working Capital b. Temporary Working Capital c. Both a and b d. Net Working Capital |
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Answer» d. Net Working Capital |
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| 7107. |
In last year the current ratio was 3:1 and quick ratio was 2:1.Presently current ratio is 3:1 but quick ratio is 1:1.This indicates comparably a. high liquidity b. higher stock c. lower stock d. low liquidity |
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Answer» b. higher stock |
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| 7108. |
In finance, "working capital" means the same thing as a) total assets. b) fixed assets. c) current assets. d) current assets minus current liabilities. |
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Answer» c) current assets. |
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| 7109. |
Which of the following would not be financed from working capital?A. Cash float.B. Accounts receivable.C. Credit sales.D. A new personal computer for the office. |
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Answer» D. A new personal computer for the office. Cash float and accounts receivable/credit sales use up working capital which will eventually be returned. A personal computer is a piece of physical equipment which will be wholly used up and have little or no value at the end of its life. |
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| 7110. |
If the weighting of equity in total capital is 1/3, that of debt is 2/3, the return on equity is 15% that of debt is 10% and the corporate tax rate is 32%, what is the Weighted Average Cost of Capital (WACC)? a) 10.533% b) 7.533% c) 9.533% d) 11.350% |
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Answer» (c) 9.533% . |
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| 7111. |
In the balance sheet amount of total assets is Rs.10 lac, current liabilities Rs.5 lac & capital & reserves are Rs.2 lac .What is the debt equity ratio?a) 1:1 b) 1.5:1 c) 2:1 d) none of the above. |
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Answer» d) none of the above. |
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| 7112. |
Which of the following would not be financed from working capital? a) Cash float. b) Accounts receivable. c) Credit sales. d) A new personal computer for the office. |
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Answer» d) A new personal computer for the office. |
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| 7113. |
What is the difference between the current ratio and the quick ratio? a) The current ratio includes inventories and the quick ratio does not. b) The current ratio does not include inventories and the quick ratio does. c) The current ratio includes physical capital and the quick ratio does not. d) The current ratio does not include physical capital and the quick ratio does |
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Answer» a) The current ratio includes inventories and the quick ratio does not. |
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| 7114. |
If a company issues bonus shares the debt equity ratio will a) Remain unaffected b) Will be affected c) Will improve d) none of the above. |
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Answer» c) Will improve |
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| 7115. |
An asset is aa. Source of fund b. Use of fund c. Inflow of funds d. none of the above. |
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Answer» An asset is a Use of fund |
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| 7116. |
Which of the following working capital strategies is the most aggressive? a) Making greater use of short term finance and maximizing net short term asset. b) Making greater use of long term finance and minimizing net short term asset. c) Making greater use of short term finance and minimizing net short term asset. d) Making greater use of long term finance and maximizing net short term asset |
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Answer» c) Making greater use of short term finance and minimizing net short term asset. |
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| 7117. |
Banks generally prefer Debt Equity Ratio at : a) 1:1 b) 1:3 c) 2:1 d) 3:1 |
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Answer» Banks generally prefer Debt Equity Ratio at 2:1 |
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| 7118. |
Which of the following is not a metric to use for measuring the length of the cash cycle? a) Acid test days. b) Accounts receivable days. c) Accounts payable days. d) Inventory days. |
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Answer» a) Acid test days. |
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| 7119. |
Which of the following is not the responsibility of financial management? a) allocation of funds to current and capital assets b) obtaining the best mix of financing alternatives c) preparation of the firm's accounting statements d) development of an appropriate dividend policy |
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Answer» c) preparation of the firm's accounting statements |
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| 7120. |
Debt Equity Ratio is 3:1, the amount of total assets Rs.20 lac, current ratio is 1.5 : 1 and owned funds Rs.3 lac. What is the amount of current asset?a) Rs.5 lac b) Rs.3 lac c) Rs.12 lac d) none of the above. |
| Answer» c) Rs.12 lac . | |
| 7121. |
The supply of foreign exchange comes from(a) the foreigners purchasing home country’s goods and services through exports (b) the foreigners who invest in home country through joint ventures or through financial market operations (c) currency dealers and speculators. (d) all of them |
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Answer» (d) all of them |
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| 7122. |
Foreign exchange is demanded by(a) domestic residents to purchase goods and services from other countries (b) sending gifts and grants to foreign countries (abroad) (c) the domestic residents to purchase financial assets in a particular countiy (d) all of them |
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Answer» (d) all of them |
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| 7123. |
What will be the effect on exports if foreign exchange rate increases? (a) Increases (b) Decreases (c) Remains constant (d) None of them |
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Answer» (a) Increases |
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| 7124. |
Which of the following are not among the daily activities of financial management? a) sale of shares and bonds b) credit management c) inventory control d) the receipt and disbursement of funds |
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Answer» (a) sale of shares and bonds |
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| 7125. |
Increase in the value of domestic currency by the government is called (a) depreciation (b) devaluation (c) revaluation (d) appreciation |
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Answer» (c) revaluation |
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| 7126. |
Reduction in the value of domestic currency by the government is called (a) depreciation (b) devaluation (c) revaluation (d) appreciation |
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Answer» (b) devaluation |
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| 7127. |
Name the two sectors working in Indian Economy. |
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Answer» (a) Private sector (b) Public sector. |
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| 7128. |
Which function of foreign exchange market protects against the foreign exchange risk? (a) Credit function (b) Hedging function (c) Transfer function (d) All of them |
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Answer» (b) Hedging function |
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| 7129. |
State any one type of Bank account. |
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Answer» Savings bank account. |
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| 7130. |
A government company is any company in which the paid up capital held by the government is not less than :(a) 49% (b) 51% (c) 50% (d) 25% |
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Answer» Correct option (b) 51% |
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| 7131. |
How many members have to sign Memorandum of Association in case of public company? |
| Answer» Seven members. | |
| 7132. |
What is e-Business? |
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Answer» e-business is the conduct of industry, trade and commerce using the computer networks. |
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| 7133. |
Expand RTGS. |
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Answer» Real Time Gross Settlement. |
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| 7134. |
Carbon Monoxide emitted by automobiles directly contributes to(a) Water pollution (b) Noise pollution (c) Land pollution (d) Air pollution |
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Answer» Correct option (d) Air pollution. |
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| 7135. |
The payment mechanism most typical to e-business is :(a) Cash on delivery (b) cheques (c) credit and debit card (d) e-cash |
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Answer» Correct option (c) Credit and debit card |
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| 7136. |
Carbon monoxide emitted by automobiles directly contributes to :(a) Water pollution (b) Noise pollution (c) Sound pollution (d) Air Pollution |
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Answer» Correct option (d) Air pollution. |
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| 7137. |
Who are promoters? |
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Answer» When any person or a group of persons or when a company who have discovered an opportunity, proceeds to form a company, he is known as promoter. |
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| 7138. |
What is TAX holiday? |
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Answer» Exemption from paying taxes for 5 or 10 years given to industries established in backward, hilly and tribal areas. |
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| 7139. |
What is retail trade? |
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Answer» A retailer is a business enterprise that is engaged in the sale of goods and services directly to the ultimate consumers. |
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| 7140. |
Define Partnership. |
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Answer» The Indian partnership Act, 1932 defines partnership as "the relation between persons who have agreed to share the profit of the business carried on by all or any one of them acting for all. |
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| 7141. |
What is import trade? |
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Answer» Importing is purchasing of foreign products and bringing them into one's home country. |
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| 7142. |
State any two auxiliaries to trade. |
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Answer» Transport, Banking, Insurance. |
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| 7143. |
Name any one document of export business. |
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Answer» Export Invoice. |
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| 7144. |
State any two types of Economic activities. |
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Answer» (a) Business (b) Profession (c) Employment. |
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| 7145. |
Which of the following document is not required in export trade?(a) Certificate of Origin (b) Certificate of Inspection (c) Mate's receipt (d) Bill of Entry |
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Answer» Correct option (d) Bill of Entry. |
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| 7146. |
Expand : WTO. |
| Answer» World Trade Organisation. | |
| 7147. |
Which of the following is not a fixed shop large retailer?(a) General Stores (b) Chain Stores (c) Mail order houses (d) Super Markets |
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Answer» Correct option (a) General stores. |
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| 7148. |
What is meant by price ceiling ? Explain its implications. |
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Answer» Price Ceiling: It refers to fixing of the maximum price of a commodity at a level lower than the equilibrium price. The government imposes price ceiling in case of essential commodities (Wheat, Sugar; Kerosene etc.) when the equilibrium price determined by free market forces of demand and supply is high. Implications of price ceiling : (i) Shortage (excess demand): At this controlled price quantity demanded is more than quantity supplied. It creates a shortage and to overcome this shortage government may enforce the rationing system. (ii) Black marketing: If rationing is not administered by the government effectively it results in black marketing. Due to excess demand buyers will compete and they would be willing to buy a commodity at a higher price than the price fixed by the government. |
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| 7149. |
Discuss economic reforms in India in the light of Social Justice and Welfare. |
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Answer» Some studies have stated that there existed deep rooted inequalities in Indian society and the economic reform policies were initiated by the government, 1991 further aggravated the inequalities. Reforms, led to an increase in the income of those who were already rich. Quality of consumption of only high income groups increased, economic growth has not trickled down to the poorer sections of the society. Growth has been concentrated only in some selected areas in the service sector such as telecommunication, information technology, finance, entertainment, travel, hospitality services, real estate and trade. Vital sectors such as agriculture and industry which provide livelihoods to millions of people in the country have not been benefited much from reforms thereby increasing income disparities. Besides, large scale production has been promoted under reforms at the cost of small scale industries again leading to concentration of economic power with large industrial houses and MNCs. |
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| 7150. |
What is Indifference Curve ? State three properties of indifference curves. |
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Answer» Indifference Curve is locus of points representing different combinations of the only two goods the consumer consumes with each combination having same utility level. Properties of Indifference Curve are - (i) Indifference Curve slopes downward from left to right. (ii) Indifference Curve is convex to the origin (iii) Higher Indifference Curve represents higher utility |
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