Finance MCQs
Finance MCQs cover financial management, investment analysis, markets, and corporate finance. Ideal for MBA, CFA, and competitive exams like PPSC, FPSC, NTS, and SBP, they build concepts, analytical skills, speed, and accuracy through real-world scenarios.
Q: A company operating with negative working capital may face
A) Increased tax burden
B) Liquidity crisis
C) Lower costs
D) Profit surge
✅ Correct Answer: B
Explanation: Negative working capital means current liabilities exceed current assets, risking liquidity issues.
Q: A callable bond allows the issuer to
A) Cancel dividends
B) Avoid interest
C) Repay early
D) Sell more equity
✅ Correct Answer: C
Explanation: Callable bonds can be redeemed by the issuer before maturity, often when interest rates fall.
Q: The debt service coverage ratio assesses
A) Investment returns
B) Dividend growth
C) Ability to pay debt obligations
D) Tax liability
✅ Correct Answer: C
Explanation: DSCR measures how easily a company can pay back interest and principal on debt.
Q: Convertible debentures can be exchanged for
A) Preference shares
B) Bank loans
C) Equity shares
D) Cash flow
✅ Correct Answer: C
Explanation: Convertible debentures give holders the option to convert into equity at a later stage.
Q: A financial lease involves
A) Refundable security
B) Temporary use
C) Ownership transfer at end
D) Operating cost only
✅ Correct Answer: C
Explanation: Financial leases transfer ownership or provide long-term usage rights with full payment.