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 modified internal rate of return (MIRR) addresses
A) Cash budgeting
B) Multiple IRRs
C) Dividend reinvestment
D) Tax incentives
✅ Correct Answer: B
Explanation: MIRR resolves issues in IRR when projects have non-conventional cash flows.
Q: Risk-free securities are typically
A) Corporate bonds
B) Equity shares
C) Treasury bills
D) Mutual funds
✅ Correct Answer: C
Explanation: Treasury bills are considered virtually risk-free due to government backing.
Q: In capital structure, the optimal mix minimizes
A) Asset depreciation
B) Employee turnover
C) Cost of capital
D) Sales variance
✅ Correct Answer: C
Explanation: An optimal capital structure balances debt and equity to achieve the lowest weighted average cost of capital.
Q: The flotation cost relates to
A) Interest payments
B) Loan maturity
C) Issuance of new securities
D) Product pricing
✅ Correct Answer: C
Explanation: Flotation costs are expenses incurred during the issuance of new equity or debt.
Q: Cross hedging involves
A) Government securities only
B) Real estate assets
C) Same currency
D) Different but correlated assets
✅ Correct Answer: D
Explanation: Cross hedging reduces risk by using related assets when direct hedging is not possible.