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: The beta coefficient indicates
A) Asset liquidity
B) Inflation sensitivity
C) Volatility relative to market
D) Dividend growth rate
✅ Correct Answer: C
Explanation: Beta measures a stock's volatility in comparison to the overall market.
Q: A financial derivative derives value from
A) Gold reserves
B) Asset depreciation
C) Future prices of underlying assets
D) Foreign currency
✅ Correct Answer: C
Explanation: Derivatives are contracts based on underlying assets like stocks, commodities, or currencies.
Q: Asset-backed securities are supported by
A) Company equity
B) Fixed deposits
C) Government grants
D) Pooled financial assets
✅ Correct Answer: D
Explanation: Asset-backed securities are backed by pools of loans or receivables.
Q: A decrease in net working capital implies
A) Improved liquidity
B) High leverage
C) Cash shortage
D) Reduced operating efficiency
✅ Correct Answer: C
Explanation: Lower working capital suggests reduced short-term liquidity and may indicate financial strain.
Q: The interest rate charged by central banks to commercial banks is called
A) Prime rate
B) Capital rate
C) Repo rate
D) Real rate
✅ Correct Answer: C
Explanation: The repo rate is the rate at which the central bank lends to commercial banks.