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: An increase in working capital usually indicates
A) Increase in liabilities
B) Higher short-term liquidity
C) Lower profits
D) Decline in operations
✅ Correct Answer: B
Explanation: Higher working capital suggests better liquidity and short-term financial health.
Q: A company issues shares to
A) Reduce equity
B) Avoid taxation
C) Raise capital
D) Increase liabilities
✅ Correct Answer: C
Explanation: Shares are issued to raise equity capital for business growth and operations.
Q: High inventory turnover means
A) Inefficient stock control
B) High storage cost
C) Fast-moving inventory
D) Excessive inventory
✅ Correct Answer: C
Explanation: A high turnover indicates strong sales and efficient inventory management.
Q: A credit rating evaluates
A) Profit margin
B) Tax compliance
C) Stock price
D) Creditworthiness
✅ Correct Answer: D
Explanation: Credit ratings assess the ability of entities to meet financial obligations.
Q: The CAPM model is used to
A) Calculate liquidity
B) Determine required return
C) Predict inflation
D) Assess interest rates
✅ Correct Answer: B
Explanation: The Capital Asset Pricing Model estimates expected return based on risk and market performance.