IC89 Mock Test Sample 6
Financial management and management accounting focus on planning, budgeting, investment decisions, and risk management to improve business performance. Financial markets provide liquidity, price discovery, and mobilization of savings. Instruments such as bonds, debentures, derivatives, futures, and equity funds help investors achieve financial objectives. Ratio analysis, solvency analysis, and financial statement analysis are important tools for evaluating company performance and financial stability. Regulatory bodies like SEBI and IRDAI ensure transparency and investor protection. Concepts such as systematic risk, liquidity ratio, variance, and capital budgeting are essential in investment analysis. Insurance, mutual funds, and AIFs play key roles in financial markets.
Q1. What is the primary objective of financial management?
a) Entertainment
b) Wealth maximization
c) Employee training
d) Product design
Q2. Which ratio measures a firm's ability to meet short-term liabilities?
a) Profitability ratio
b) Liquidity ratio
c) Activity ratio
d) Market ratio
Q3. Which financial instrument represents long-term debt?
a) Equity shares
b) Preference shares
c) Bonds and Debentures
d) Mutual funds
Q4. Which organization regulates the securities market in India?
a) RBI
b) IRDAI
c) SEBI
d) NABARD
Q5. Which type of risk affects the entire market?
a) Business risk
b) Financial risk
c) Systematic risk
d) Default risk
Q6. Which contract is standardized and traded on exchanges?
a) Forward contract
b) Futures contract
c) Open contract
d) Swap contract
Q7. What does FDI stand for?
a) Fixed Deposit Investment
b) Foreign Direct Investment
c) Financial Debt Instrument
d) Fund Deposit Insurance
Q8. Which fund mainly invests in company shares?
a) Debt fund
b) Equity fund
c) Hedge fund
d) Infrastructure fund
Q9. Which analysis compares financial data for decision-making?
a) Ratio analysis
b) Technical analysis
c) Market analysis
d) Demand analysis
Q10. Which policy has no savings element?
a) Whole life policy
b) Endowment policy
c) Term insurance
d) Pension plan
Q11. What is the face value of a bond called?
a) Coupon rate
b) Interest rate
c) Maturity value
d) Par value
Q12. Which market function helps determine security prices?
a) Liquidity
b) Price discovery
c) Financing
d) Hedging
Q13. Which ratio is also known as expense ratio?
a) Operating ratio
b) Liquidity ratio
c) Solvency ratio
d) Market ratio
Q14. Which activities are principal revenue-generating activities?
a) Financing activities
b) Investing activities
c) Operating activities
d) Administrative activities
Q15. What is the mean of squared deviations of returns called?
a) Beta
b) Variance
c) Alpha
d) Standard ratio
Q16. Who are the investors in mutual funds called?
a) Shareholders
b) Creditors
c) Unit holders
d) Debtors
Q17. Which budgeting method sets targets and standards?
a) Cash budgeting
b) Flexible budgeting
c) Budgetary control
d) Zero budgeting
Q18. Which derivative protects farmers against price fluctuations?
a) Commodity derivative
b) Equity derivative
c) Embedded derivative
d) Currency derivative
Q19. Which accounting tool helps in planning and control?
a) Auditing
b) Management accounting
c) Bookkeeping
d) Taxation
Q20. Which financial statement shows assets and liabilities?
a) Cash flow statement
b) Income statement
c) Balance sheet
d) Fund flow statement
