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Business & Finance MCQs

Prepare for competitive exams with our comprehensive Business & Finance MCQs, designed for students of commerce and candidates appearing in recruitment tests. These multiple-choice questions cover financial management, accounting, auditing, business law, corporate governance, investment analysis, banking, cost of capital, stock markets, marketing, human resource management, and business communication. Highly beneficial for aspirants of PPSC, FPSC, CSS, NTS, SPSC, BPSC, KPSC, ETEA, AJKPSC, as well as banking sector exams, commerce lecturer tests, and business-related university assessments (B.Com, M.Com, MBA, ACCA, CA).

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1 Finance MCQs

Which institutions issue securities, handle brokerage, and trade in securities?

  • Trading institutions
  • Activity institutions
  • Investment banks
  • Mortgage banks
0 Comments
Correct Answer: C. Investment banks

Explanation:

Investment banks are financial institutions that help companies and governments raise capital by issuing and ... Read More Details

2 Finance MCQs

Which term refers to the ability of an asset to be quickly converted into cash?

  • Variable securities
  • Convertible securities
  • Liquidity
  • Constant securities
0 Comments
Correct Answer: C. Liquidity

Explanation:

Liquidity means how easily and quickly an asset can be converted into cash without affecting ... Read More Details

3 Finance MCQs

Companies that collect money from individuals and businesses and invest it in a portfolio of assets are called __________?

  • Activity funds
  • Mutual funds
  • Penalty funds
  • Financing funds
0 Comments
Correct Answer: B. Mutual funds

Explanation:

Mutual funds are investment companies that pool money from individual and institutional investors ... Read More Details

4 Finance MCQs

The risk that occurs when there is not enough capital to cover a sudden decrease in asset value is called __________?

  • Insolvency risk
  • Solvency risk
  • Balanced risk
  • Unbalanced risk
0 Comments
Correct Answer: A. Insolvency risk

Explanation:

Insolvency risk occurs when a financial institution does not have sufficient capital to cover losses ... Read More Details

5 Finance MCQs

The market value of outstanding instruments in the capital market depends on __________?

  • Primary cash flows
  • Number of issued securities
  • Market prices of securities
  • Both B and C
0 Comments
Correct Answer: D. Both B and C

Explanation:

The market value of outstanding instruments in the capital market depends on two key factors: ... Read More Details

6 Finance MCQs

The depository institutions include __________?

  • Mutual funds
  • Commercial banks and thrifts
  • Savings banks
  • Credit unions
0 Comments
Correct Answer: B. Commercial banks and thrifts

Explanation:

Depository institutions are financial institutions that accept deposits from the public and provide loans. They ... Read More Details

7 Finance MCQs

The market where governments issue securities to raise short-term funds is called __________?

  • Money market instruments
  • Capital market instruments
  • Counter instruments
  • Long-term instruments
0 Comments
Correct Answer: A. Money market instruments

Explanation:

The money market is where governments issue short-term debt instruments, such as Treasury bills, to ... Read More Details

8 Finance MCQs

The risk where the value of assets and liabilities changes due to exchange rate fluctuations is called __________?

  • Economic rates
  • Foreign exchange risk
  • Selling rate
  • Buying rate
0 Comments
Correct Answer: B. Foreign exchange risk

Explanation:

Foreign exchange risk, also known as currency risk, occurs when the value of ... Read More Details

9 Finance MCQs

The economic period when banks have excess funds is called __________?

  • Functional timeline
  • Contract timing
  • Contraction period
  • Expansionary period
0 Comments
Correct Answer: D. Expansionary period

Explanation:

An expansionary period refers to a phase in the economic cycle when economic activity increases, ... Read More Details

10 Finance MCQs

The accounting entry for institutions that borrow federal funds is recorded as __________?

  • Income in income statement
  • Expense on income statement
  • Liability on balance sheet
  • Asset on balance sheet
0 Comments
Correct Answer: C. Liability on balance sheet

Explanation:

When an institution borrows federal funds, it incurs an obligation to repay the borrowed amount. ... Read More Details