R4RIN – MCQs, Mock Tests | CBES Board Class 11 CS Executive Financial and Strategic Management MCQ

___is the lifeblood of a business.

1. Finance Manager
2. Finance
3. Financial Management
4. Corporate Financial Management

✅ Correct Answer: 2

Shareholder wealth” in a firm is represented by___

1. The number of people employed in the firm.
2. The book value of the firm’s assets less the book value of its liabilities.
3. The amount of salary paid to its employees
4. The market price per share of the firm’s common stock.

✅ Correct Answer: 4

Financial Management is study – Of the process of procuring and judicious use of financial resources Undertaken to maximize the value of the firm/owners. Select the correct answer from the options given below.

1. (I) only
2. (II) only
3. Both (I) and (II)
4. Neither (I) nor (II)

✅ Correct Answer: 3

To increase a given present value, the discount rate should be adjusted –

1. Upward
2. Downward
3. Keep as it is
4. None of the above

✅ Correct Answer: 2

Financial Management is concerned with___

1. Investment Decisions
2. Finance Decisions
3. Dividend Decisions
4. All of the above

✅ Correct Answer: 4

Procurement of funds inter alia includes___ (a) Identification of sources of finance (b) Determination of finance mix (c) Raising of funds (d) Division of profits between dividends and retention of profits of internal funds generation Select the correct answer from the options given below.

1. (a) & (b)
2. (a), (c) & (d)
3. (b) & (c)
4. (c), (a), (d) & (b)

✅ Correct Answer: 4

The market price of a share of common stock is determined by:

1. The board of directors of the firm
2. The stock exchange on which the stock is listed.
3. The president of the company.
4. Individuals buying and selling the stock.

✅ Correct Answer: 4

Which of the following is/are the basic aspects of financial management? (1) Procurement of funds. (2) Appointment of capable financial personnel. (3) Effective use of funds to achieve business objectives. (4) Increase the national resources. Select the correct answer from the options given below.

1. (1) & (3)
2. (2) & (4)
3. (1) & (4)
4. (2) & (3)

✅ Correct Answer: 1

The focal point of financial management in a firm is____

1. The number and types of products or services provided by the firm.
2. The minimization of the amount of taxes paid by the firm.
3. The creation of value for shareholders
4. The profits earned by the firm.

✅ Correct Answer: 3

A business organization can obtain funds from –

1. Issue of preference or equity share capital
2. Issue of debentures
3. Loan from banks and financial institution
4. All of the above

✅ Correct Answer: 4

The decision function of financial management can be broken down into decisions.

1. Financing and investment
2. Investment, financing & asset management
3. Financing and dividend
4. Capital budgeting, cash management & credit management

✅ Correct Answer: 2

Statement (I): Since funds can be obtained from different sources, therefore, their procurement is always considered a complex problem by business concerns. Statement (II): Funds produced from different sources have different characteristics in terms of risk, cost, and control. Select the correct answer from the options given below.

1. Statement I is correct but Statement II is incorrect.
2. Statement II is correct but Statement I is incorrect.
3. Statement I & Statement II both are correct and Statement II support Statement I.
4. Statement I & Statement II both are incorrect.

✅ Correct Answer: 3

The funds raised by the issue of____are the best from the risk point of view for the company.

1. equity shares
2. debentures
3. both (A) & (B)
4. none of the above

✅ Correct Answer: 1

Financial management is –

1. Science
2. Art
3. Both
4. None

✅ Correct Answer: 3

A 30-year bond issued by Reliance Ltd. in 2007 would now trade in the –

1. Primary money market
2. Secondary money market
3. Primary capital market
4. Secondary capital market

✅ Correct Answer: 4

Which of the following is not a function of a finance manager?

1. Investor relations
2. Credit & collections
3. Investments
4. Appointment of financial personnel

✅ Correct Answer: 4

Money market mutual funds –

1. Are also known as finance companies
2. Enable individuals and small businesses to invest indirectly in money-market instruments.
3. Are available only to high net-worth individuals.
4. Are involved in acquiring and placing mortgages.

✅ Correct Answer: 2

The purpose of financial markets is to:

1. Increase the price of common stocks
2. Lower the yield on bonds
3. Allocate savings efficiently
4. Control inflation

✅ Correct Answer: 3

Investment decisions are concerned with –

1. Efficient allocation of funds to specific assets
2. Determining the proper amount of funds to be employed in the firm.
3. Determining the composition of liabilities
4. Short-run projects

✅ Correct Answer: 1

___ensures that the firm utilizes its available resources most efficiently under conditions of competitive markets.

1. Wealth Maximization
2. Profit Maximization
3. Value Maximization
4. Relation Maximization

✅ Correct Answer: 2

For which of the following reason(s) profit maximization concept is criticized – 1. It is vague conceptually. 2. It ignores the timing of returns. 3. It ignores the risk factor 4. Its emphasis is generally on short-run projects. Select the correct answer from the options given below.

1. 1
2. 1 & 2
3. 1, 2 & 3
4. 1,2, 3 &4

✅ Correct Answer: 4

_____consistent with the object of maximizing the owner’s economic welfare.

1. Profit Maximization
2. Wealth Maximization
3. Relation Maximization
4. All of the above

✅ Correct Answer: 2

FinancialManagementis concerned with –

1. Profit Maximization
2. Both (A) & (C)
3. Wealth Maximization
4. Both (A) & (C) plus Relation Maximization

✅ Correct Answer: 2

Assertion (A): Profit maximization as an objective does not take into account the time pattern of returns. Reason (R): The finance managers will accept highly risky proposals if they give high profits by applying the profit maximization concept. Select the correct answer from the options given below.

1. Both A and R are true and R is the correct explanation of A.
2. Both A and R are true but R is not a correct explanation of A.
3. A is true but R is false
4. A is false but R is true

✅ Correct Answer: 2

Profit maximization –

1. Cannot be the sole objective of a company
2. Is at best a limited objective
3. Has to be attempted with a realization of risks involved
4. All of the above

✅ Correct Answer: 4

Profit maximization –

1. Cannot be the sole objective of a company
2. Is at best a limited objective.
3. Has to be attempted with a realization of risks involved
4. All of the above

✅ Correct Answer: 4

Under inflationary conditions, the value of money expressed in terms of its purchasing power over goods and services

1. Incline
2. Declines
3. Increases
4. Remains constant

✅ Correct Answer: 2

___is a condition where a company cannot meet or has difficulty paying off, its financial obligations to its creditors, typically due to high fixed costs, illiquid assets, or revenues sensitive to economic downturns.

1. Financial risk
2. Financial uncertainty
3. Financial certainty
4. Financial distress

✅ Correct Answer: 4

___means the organization can no longer meet its financial obligations with its lender or lenders as debts become due.

1. Financial certainty
2. Financial insolvency
3. Financial risk
4. Identified risk

✅ Correct Answer: 2

Assertion (A): Profit maximization, as an objective is too narrow. Reason (R): It ignores the timing of returns and also fails to take into account the social considerations as also the obligations to various interests of workers, consumers, society, ethical trade practices.

1. Both A and R are true and R is the correct explanation of A.
2. Both A and R are true but R is not the correct explanation of A
3. A is true but R is false
4. A is false but R is true

✅ Correct Answer: 1

A permanent_____may lead an organization to the chaotic state

1. Financial insolvency; financial certainty
2. Financial distress; Identified risk
3. Identified risk; financial insolvency
4. Financial distress; financial insolvency

✅ Correct Answer: 4

Using _in the capital structure of a company is called financial gearing.

1. Borrowed funds or fixed cost funds
2. Owners funds or fixed cost funds
3. Owners funds
4. Reserve or balance of profit & loss account

✅ Correct Answer: 1

High financial gearing will___

1. Decrease the EPS of the company if earnings before interest and taxes are rising
2. Increase the EPS of the company if earnings before interest and taxes are declining
3. Decrease the EPS of the company if earnings before interest and taxes are declining
4. Increase the EPS of the company if earnings before interest and taxes are rising

✅ Correct Answer: 4

Higher the level of financial gearing___

1. Greater will be the risk.
2. Lower will be the risk
3. Risk will be constant.
4. None of the above

✅ Correct Answer: 1

Financial management is broadly concerned with___

1. Raising of funds
2. Creating value to the assets of the business enterprise
3. Efficient allocation of funds
4. All of the above

✅ Correct Answer: 4

Financial Management can be judged by the study of the nature of___

1. Corporate, social & benefit decisions.
2. Accounting, financing & dividend decisions.
3. Personnel, human cost & economic decisions
4. Investment, financing & dividend decisions.

✅ Correct Answer: 4