IC89 Mock Test Sample 8

Q1. What is the main objective of financial management?
a) Profit sharing
b) Wealth maximization
c) Employee welfare
d) Cost cutting

Q2. Which ratio measures short-term solvency of a company?
a) Profitability ratio
b) Liquidity ratio
c) Activity ratio
d) Market ratio

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

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

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

Q6. Which contract is standardized and traded on stock exchanges?
a) Forward contract
b) Futures contract
c) Swap contract
d) Open contract

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

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

Q9. Which analysis helps compare financial performance?
a) Demand analysis
b) Technical analysis
c) Ratio analysis
d) Market analysis

Q10. Which insurance policy has no savings feature?
a) Whole life policy
b) Endowment policy
c) Pension plan
d) Term insurance

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

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

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

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

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

Q16. Investors in mutual funds are known as:
a) Creditors
b) Shareholders
c) Unit holders
d) Debtors

Q17. Which system sets targets and performance standards?
a) Budgetary control system
b) Inventory control system
c) Cash system
d) Cost system

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

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

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