Financial Management MCQ on Sources of Financing

Financial Management MCQ on Sources of Financing

1. In which market the newly issued securities and share are bought or sold during initial public


(a) Primary market

(b) Secondary market

(c) Insurance markets

(d) Investment Market

Ans-(a) Primary market

2. The equity shares are classified as blue chip shares, growth shares, income shares, cyclical shares, defensive shares and speculative shares by the stock market on the basis of their

(a) Risk exposure

(c) Return potential

(b) Both of these

(d) None of these

Ans-(b) Both of these

3. Which market provides instruments for managing the financial risk?

(a) Money market

(b) Bond market

(c) Derivatives market

(d) Commodity market

Ans-(c) Derivatives market

4. Which market provide finance for long term purpose ?

(a) Money market

(b) Capital market

(c) Both of these

(d) None of these

Ans-(b) Capital market

5. Equity shares are known as:

(a) Debt securities

(b) Ownership securities

(c) Both

(d) None of the above

Ans-(b) Ownership securities

6. Which market provide finance for short term purpose ?

(a) Money market

(c) Capital market

(b) Both of these

(d) None of these

Ans-(a) Money market

7. In which market the existing securities are brought and sold ?

(a) Donation markets

(b) Primary market

(c) Secondary market

(d) Insurance Market

Ans-(c) Secondary market

8. A lease agreement which gives only a limited right to the lessee to use the asset is called

(a) Operating lease

(b) Financial lease

(c) Leveraged leasing

(d) Sale and lease back

Ans-(a) Operating lease

9. The bonds which are issued with a call premium is also known as:

(a) Forward

(b) Callable

(c) Swap

(d) Future

Ans-(b) Callable

10. Arrear Dividend is paid to the Preference share otherwise known as

(a) Participate Preference share

(b) Cumulative preference shares

(c) Noncumulative preference shares

(d) None of these

Ans-(b) Cumulative preference shares

11. The creditorship security with specified period, fixed rate of return, low capital uncertainty with perfect income certainty is known as:

(a) Debentures/Bonds

(b) Preference shares

(c) Ordinary/Equity Shares

(d) All of these

Ans-(a) Debentures/Bonds

12. Preference shares are hybrid instruments containing the features of:

(a) Debentures

(c) Equity Shares

(b) Debentures & Equity Shares

(d) None of these

Ans-(b) Debentures & Equity Shares

13. A transaction where goods are delivered to the purchaser immediately and purchase price is to be made as installment wise.

(a) Leasing

(b) Causing

(c) Hire purchase

(d) Tire Purchase

Ans-(c) Hire purchase

14. The responsibility of use and maintenance of the asset in operating lease lies with the

(a) Lessor

(b) Lessee

(c) Messi

(d) Desi

Ans-(a) Lessor

15. The long term and non-cancellable lease where the ownership may be transfer to lessee is

(a) Operating lease

(b) Sale and lease back

(c) Leveraged leasing

(d) Financial lease

Ans-(d) Financial lease

16. In which of following lease agreement owner of an asset sells the asset to a party (the buyer), who in turn leases back the same asset to the owner in consideration of some lease rentals?

(a) Insurance Lease

(b) Sale and lease back

(c) Operating lease

(d) Financial lease

Ans-(b) Sale and lease back

17.The smallest unit of the capital is known as:

(a) Share

(b) Unit

(c) Account

(d) Bond

Ans-(a) Share

18. New issued share are related to

(a) Primary market

(b) Secondary market

(c) Daily market

(d) Fish market

Ans-(a) Primary market

19. Stock market is a

(a) Money Market

(b) Capital Market

(c) Insurance Market

(d) Donation Market

Ans-(b) Capital Market

20. Full Form of UTI

(a) Unique Tattoo of India

(b) Unique Table in India

(c) Unit Trust of India

(d) Unit Technique in Insurance

Ans- (c) Unit Trust of India 

Also Read Financial Management MCQ

  1. Financial Management MCQ-Fundamentals
  2. FM MCQ on Time Value of Money
  3. Financial Management MCQ on Risk and Return
  4. Financial Management MCQ on Equity Valuation
  5. Financial Management MCQ on Valuation of Bonds

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