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 cost of capital represents
A) Total expenditure
B) Cash surplus
C) Gross profit
D) Minimum expected return
✅ Correct Answer: D
Explanation: Cost of capital is the minimum return required to justify an investment.
Q: A higher debt-equity ratio indicates
A) Better asset utilization
B) Greater financial risk
C) Higher profitability
D) Lower liquidity
✅ Correct Answer: B
Explanation: Higher debt increases obligations, indicating greater financial leverage and risk.
Q: Preference shares typically offer
A) Voting rights
B) High capital gains
C) Tax exemption
D) Fixed dividend
✅ Correct Answer: D
Explanation: Preference shareholders receive fixed dividends before equity shareholders.
Q: The main function of a financial intermediary
A) Collect taxes
B) Channel funds from savers to borrowers
C) Control inflation
D) Issue currency
✅ Correct Answer: B
Explanation: Financial intermediaries link savers and borrowers, facilitating capital flow.
Q: The most liquid asset in financial accounting is
A) Fixed assets
B) Accounts receivable
C) Cash
D) Inventory
✅ Correct Answer: C
Explanation: Cash is the most liquid asset, readily available for transactions or liabilities.