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: A company is said to be overcapitalized when
A) Assets exceed liabilities
B) Capital equals liabilities
C) Capital exceeds funding needs
D) Capital is used efficiently
✅ Correct Answer: C
Explanation: Overcapitalization occurs when a company raises more capital than required, reducing returns.
Q: The purpose of financial planning is to
A) Avoid losses
B) Forecast profits only
C) Allocate funds efficiently
D) Increase liabilities
✅ Correct Answer: C
Explanation: Financial planning ensures optimal fund allocation and long-term financial stability.
Q: Interest is considered compound when
A) Paid on savings only
B) Earned only once
C) Tax-free
D) Earned on both principal and accumulated interest
✅ Correct Answer: D
Explanation: Compound interest includes both the original principal and prior interest in calculations.
Q: A share with a variable dividend is called
A) Convertible share
B) Redeemable share
C) Fixed return share
D) Equity share
✅ Correct Answer: D
Explanation: Equity shares do not guarantee a fixed return and depend on company profits.
Q: Working capital is defined as
A) Total assets
B) Current assets minus current liabilities
C) Inventory value
D) Total liabilities minus equity
✅ Correct Answer: B
Explanation: Working capital indicates short-term financial health and operational efficiency.