#1
What is the primary goal of financial management?
Maximizing shareholder wealth
Maximizing sales revenue
Minimizing expenses
Maximizing employee satisfaction
#2
What does the term 'ROI' stand for in finance?
Return on Investment
Revenue on Investment
Rate of Inflation
Return of Interest
#3
What is the concept of diversification in investment?
Investing in a single asset
Investing in multiple assets with similar risk levels
Investing in multiple assets with different risk levels
Investing only in high-risk assets
#4
What is the purpose of financial ratios in analyzing a company's performance?
To determine the company's market share
To evaluate the company's profitability, liquidity, and solvency
To predict future economic trends
To calculate the company's total revenue
#5
What is the purpose of a dividend policy in finance?
To maximize shareholder wealth
To increase employee satisfaction
To minimize operational expenses
To reduce income taxes
#6
What is the formula to calculate the net present value (NPV) of an investment?
NPV = Initial Investment / Discount Rate
NPV = Cash Inflows - Cash Outflows
NPV = Cash Inflows / Discount Rate
NPV = Cash Outflows - Cash Inflows
#7
Which of the following is a measure of a company's liquidity?
Current ratio
Return on Equity (ROE)
Debt to Equity ratio
Price to Earnings (P/E) ratio
#8
What does the Capital Asset Pricing Model (CAPM) measure?
Risk and return of a security
Profit margin of a company
Liquidity of a security
Operating leverage of a company
#9
Which of the following is a measure of systematic risk?
Beta
Standard deviation
Alpha
Sharpe ratio
#10
What does the debt-to-equity ratio indicate about a company?
Its ability to pay short-term debts
Its reliance on debt financing relative to equity financing
Its profitability compared to competitors
Its current market share
#11
What is the Modigliani-Miller theorem primarily concerned with?
Capital budgeting
Cost of capital
Capital structure
Dividend policy
#12
What is the time value of money (TVM) principle based on?
Inflation
Risk
Opportunity cost
Interest rates
#13
What does the term 'efficient market hypothesis' propose?
Investors can consistently beat the market
Stock prices reflect all available information
Investors are irrational in their decision-making
Stock prices are completely random
#14
What is the 'discount rate' in the context of financial management?
The rate at which the Federal Reserve discounts loans to commercial banks
The rate at which banks offer loans to customers
The rate used to calculate the present value of future cash flows
The rate at which bonds are sold at a discount
#15
Which of the following is not a component of the DuPont analysis?
Profit Margin
Asset Turnover
Equity Ratio
Financial Leverage