IC89 Mock Test Sample 10

Q1. What is the main function of Management Accounting?
a) Entertainment
b) Decision-making
c) Manufacturing
d) Advertising

Q2. Which ratio measures the ability to meet current liabilities?
a) Profitability ratio
b) Liquidity ratio
c) Activity ratio
d) Market ratio

Q3. Which financial instrument shows ownership in a company?
a) Debentures
b) Bonds
c) Equity shares
d) Fixed deposits

Q4. Which body regulates the securities market in India?
a) RBI
b) LIC
c) SEBI
d) NABARD

Q5. Which type of risk affects the entire financial market?
a) Business risk
b) Financial risk
c) Systematic risk
d) Default risk

Q6. Which derivative contract is traded on stock exchanges?
a) Futures contract
b) Forward contract
c) Open contract
d) Informal contract

Q7. What does FDI stand for?
a) Fund Deposit Insurance
b) Foreign Direct Investment
c) Financial Debt Instrument
d) Fixed Deposit Investment

Q8. Which fund mainly invests in equity shares?
a) Debt fund
b) Equity fund
c) Infrastructure fund
d) Hedge fund

Q9. Which analysis compares financial performance of companies?
a) Demand analysis
b) Ratio analysis
c) Market analysis
d) Technical analysis

Q10. Which insurance policy gives only risk protection?
a) Whole life policy
b) Endowment policy
c) Pension policy
d) Term insurance

Q11. What is the face value of a bond called?
a) Coupon value
b) Maturity value
c) Par value
d) Market value

Q12. Which market function helps determine prices of securities?
a) Hedging
b) Financing
c) Price discovery
d) Budgeting

Q13. Which ratio is also called the Expense Ratio?
a) Solvency ratio
b) Operating ratio
c) Liquidity ratio
d) Market ratio

Q14. Which activities generate the main income of a business?
a) Investing activities
b) Financing activities
c) Operating activities
d) Administrative activities

Q15. What is the average of squared deviations from mean return called?
a) Beta
b) Alpha
c) Variance
d) Standard ratio

Q16. Mutual fund investors are known as:
a) Debtors
b) Creditors
c) Unit holders
d) Policyholders

Q17. Which system sets standards and targets for performance?
a) Inventory system
b) Budgetary control system
c) Costing system
d) Payroll system

Q18. Which derivative is commonly used for protection against price fluctuations in commodities?
a) Equity derivative
b) Commodity derivative
c) Currency derivative
d) Embedded derivative

Q19. Which statement displays assets and liabilities of a company?
a) Cash flow statement
b) Income statement
c) Balance sheet
d) Fund flow statement

Q20. Which budgeting method starts every expense estimate from zero?
a) Flexible budgeting
b) Master budgeting
c) Cash budgeting
d) Zero-based budgeting