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Finance MCQs

Boost your knowledge of business and financial concepts with our comprehensive Finance MCQs, designed for students, job seekers, and professionals preparing for competitive exams. These multiple-choice questions cover financial management, accounting principles, investment analysis, corporate finance, working capital, ratio analysis, cost of capital, stock markets, risk management, capital budgeting, and time value of money. Highly valuable for candidates appearing in PPSC, FPSC, CSS, NTS, SPSC, BPSC, KPSC, ETEA, AJKPSC, as well as banking exams, finance officer posts, and commerce-related university tests (B.Com, M.Com, MBA, ACCA).

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1 Finance MCQs

The financial intermediaries that provide loans and accept short-term and long-term debts for funding are called:

  • Activity institutions
  • Investment companies
  • Mortgage companies
  • Finance companies
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Correct Answer: D. Finance companies

Explanation:

Finance companies are non-bank financial institutions that provide loans to individuals and businesses without accepting ... Read More Details

2 Finance MCQs

The risk which arises from all activities related to contingent liabilities and assets is called:

  • Off-balance sheet risk
  • Income statement risk
  • Balance of trade risk
  • Balance of payment risk
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Correct Answer: A. Off-balance sheet risk

Explanation:

Off-balance sheet risk refers to potential losses from activities and commitments that are not recorded ... Read More Details

3 Finance MCQs

The major liabilities of commercial banks are:

  • Junk bonds
  • Deposits
  • Loans
  • Swap bonds
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Correct Answer: B. Deposits

Explanation:

Deposits are considered the major liabilities of commercial banks because banks are obligated to return ... Read More Details

4 Finance MCQs

In financial transactions, the risk that there will be no profit in selling an asset is classified as:

  • Price risk
  • Profit risk
  • Selling risk
  • Financial risk
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Correct Answer: A. Price risk

Explanation:

Price risk refers to the possibility of losing potential profit or facing losses because of ... Read More Details

5 Finance MCQs

The type of financial security which has a payoff linked to another issued security is classified as:

  • Linked security
  • Derivative security
  • Payable security
  • Non-issuing security
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Correct Answer: B. Derivative security

Explanation:

A derivative security is a financial instrument whose value or payoff depends on ... Read More Details

6 Finance MCQs

The examples of derivative securities include:

  • Swap contract
  • Option contract
  • Futures contract
  • All of the above
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Correct Answer: D. All of the above

Explanation:

Derivative securities are financial instruments whose value is based on an underlying asset, such as ... Read More Details

7 Finance MCQs

The risk that occurs due to a technology system failure is called:

  • System risk
  • Technology risk
  • Operational risk
  • Support risk
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Correct Answer: C. Operational risk

Explanation:

Operational risk refers to the potential loss caused by failures in internal processes, systems, or ... Read More Details

8 Finance MCQs

The legal document required by the Securities Exchange Commission that shows risks and details of an issue is called:

  • Prospectus
  • Stated document
  • Risk detail document
  • Exchange commission document
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Correct Answer: A. Prospectus

Explanation:

A prospectus is a formal legal document issued by a company and required by the ... Read More Details

9 Finance MCQs

Additional debt or equity instruments of a publicly traded company are issued in which market?

  • Flow market
  • Primary market
  • Secondary market
  • Funding market
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Correct Answer: B. Primary market

Explanation:

The primary market is where companies issue new securities such as shares or bonds for ... Read More Details

10 Finance MCQs

Which of the following are financial instruments of public markets?

  • Transfer funds
  • Bearer bonds
  • Shares
  • Bonds
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Correct Answer: C. Shares

Explanation:

Financial instruments of public markets are those that are traded openly and available to the ... Read More Details