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 time period required to recover the initial investment is known as
A) Profitability index
B) NPV
C) IRR
D) Payback period
✅ Correct Answer: D
Explanation: Payback period estimates how long it takes to recoup the initial outlay from cash flows.
Q: In financial modeling, sensitivity analysis is used to
A) Ignore risks
B) Assess input impact
C) Fix errors
D) Avoid assumptions
✅ Correct Answer: B
Explanation: Sensitivity analysis evaluates how changes in assumptions affect financial outcomes.
Q: A capital lease is recognized as
A) Tax refund
B) Equity investment
C) Operational cost
D) Long-term liability
✅ Correct Answer: D
Explanation: Capital leases transfer risks and rewards, and are reported as long-term liabilities.
Q: The acid-test ratio excludes
A) Marketable securities
B) Inventory
C) Cash
D) Receivables
✅ Correct Answer: B
Explanation: The acid-test or quick ratio measures liquidity excluding inventory.
Q: The minimum capital requirement under Basel III for common equity is
A) 4.5%
B) 6%
C) 8%
D) 2%
✅ Correct Answer: A
Explanation: Basel III mandates banks to maintain at least 4.5% of risk-weighted assets as common equity.