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1 Finance MCQs

The weighted average of possible returns, based on their probabilities, is called:

  • Average rate of return
  • Expected rate of return
  • Past rate of return
  • Weighted rate of return
0 Comments
Correct Answer: B. Expected rate of return

Explanation:

Expected Rate of Return


In Finance MCQs, the expected rate of return is a cornerstone concept ... Read More Details

2 Finance MCQs

If the standard deviation of an investment is 18% and the coefficient of variation is 1.5, what is the expected rate of return?

  • 27%
  • 12%
  • 19.50%
  • None of the above
0 Comments
Correct Answer: A. 27%

Explanation:

Expected Rate of Return Using Coefficient of Variation (CV)


In finance, every investment carries two fundamental ... Read More Details

3 Finance MCQs

In time value of money calculations, the nominal interest rate is typically:

  • Not shown on the timeline
  • Shown on the timeline
  • Multiplied on the timeline
  • Divided on the timeline
0 Comments
Correct Answer: A. Not shown on the timeline

Explanation:

The correct option is this Not shown on the timeline.


In Finance MCQs, understanding ... Read More Details

4 Finance MCQs

The annual estimated cost of assets that are used up each year is called:

  • Depreciation and amortization
  • Net sales
  • Net profit
  • Net income
0 Comments
Correct Answer: A. Depreciation and amortization

Explanation:

The correct option is this Depreciation and Amortization.


In Finance MCQs, depreciation and amortization ... Read More Details

5 Finance MCQs

In calculating net cash flow, depreciation and amortization are treated as:

  • Current liabilities
  • Income expenses
  • Non-cash revenues
  • Non-cash charges
0 Comments
Correct Answer: D. Non-cash charges

Explanation:

The correct option is this Non-cash charges.


In Finance MCQs, understanding non-cash charges is ... Read More Details

6 Finance MCQs

The process of determining the future value of a sum of money from its present value is called:

  • Compounding
  • Discounting
  • Money value
  • Stock value
0 Comments
Correct Answer: A. Compounding

Explanation:

The correct option is this Compounding.


In Finance MCQs, the concept of compounding is ... Read More Details

7 Finance MCQs

On a balance sheet, the sum of retained earnings and common stock is classified as:

  • Preferred equity
  • Due equity
  • Common perpetuity
  • Common equity
0 Comments
Correct Answer: D. Common equity

Explanation:

The correct option is this Common equity.


In Finance MCQs, common equity is a ... Read More Details

8 Finance MCQs

The portion of an asset’s purchase cost that is systematically allocated over its useful life is called:

  • Appreciation
  • Depreciation
  • Appreciated assets
  • Appreciated liabilities
0 Comments
Correct Answer: B. Depreciation

Explanation:

The correct option is this Depreciation.


In Finance MCQs, depreciation is a core concept ... Read More Details

9 Finance MCQs

Securities that have less predictable prices and longer maturity periods are classified as:

  • Cash equivalents
  • Long-term investments
  • Inventories
  • Short-term investments
0 Comments
Correct Answer: B. Long-term investments

Explanation:

The correct option is this Long-term investments.


In Finance MCQs, long-term investments are defined ... Read More Details

10 Finance MCQs

The information that investors use to estimate a company’s future earnings is found in:

  • Five-year report
  • Annual report
  • Stock report
  • Exchange report
0 Comments
Correct Answer: B. Annual report

Explanation:

The correct option is this Financial institutions.


In Finance MCQs, financial institutions are defined ... Read More Details