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 primary aim of a portfolio manager is to
A) Increase liabilities
B) Maximize taxes
C) Balance return and risk
D) Delay investments
✅ Correct Answer: C
Explanation: Portfolio managers seek optimal returns while managing risk exposure.
Q: If the interest rate increases, bond prices
A) Remain fixed
B) Become zero
C) Decrease
D) Increase
✅ Correct Answer: C
Explanation: Bond prices move inversely with interest rates due to fixed coupon payments.
Q: The term financial synergy refers to
A) Job loss after merger
B) Tax saving by merging
C) Production cost reduction
D) Value creation through combined cash flows
✅ Correct Answer: D
Explanation: Financial synergy arises from improved capital structure and cash flows after mergers.
Q: Operating cash flow excludes
A) Taxes
B) Interest payments
C) Depreciation
D) Dividends
✅ Correct Answer: D
Explanation: Dividends are financing activities, not part of operating cash flow.
Q: A reverse stock split results in
A) More shares at lower price
B) Increase in total capital
C) Issuance of new equity
D) Fewer shares at higher price
✅ Correct Answer: D
Explanation: Reverse stock splits reduce the number of shares while increasing the per-share price.