Welcome to your International Navodaya Chamber of Commerce (INCOC) Platform ! Subject: Advanced Financial ManagementTotal Number of Question: 40Time: 41 MinutesPlease check your email after completion of test for result.All the best... Name Phone No Email State 1. What is the main objective of sensitivity analysis in project evaluation? To calculate the IRR To assess the impact of changes in variables on project viability To ensure maximum profitability To minimize costs None 2. Which method considers the time value of money in capital budgeting? Payback period Net present value Accounting rate of return Absorption costing None 3. A project has an initial investment of ₹50,000 and generates cash inflows of ₹20,000 per year for 3 years. If the discount rate is 10%, the NPV is closest to: ₹2,000 ₹4,770 ₹4,770 ₹0 None 4. Which of the following techniques adjusts for project risk in capital budgeting? Payback period Adjusted Discount Rate Average Rate of Return Depreciation Methods None 5. When is a project acceptable based on IRR? When IRR < WACC When IRR > WACC When IRR = WACC None of the above None 6. Which of the following is not a type of financial risk? Credit Risk Market Risk Operational Risk Liquidity Risk None 7. A forward contract is: A standardized cojA standardized contract traded on an exchange A customized agreement between two parties A type of swap contract None of the above None 8. Which instrument is used to hedge interest rate risk? Equity Futures Interest Rate Swaps Commodity Options Forex Contracts None 9. What does delta measure in options trading? Sensitivity of option price to changes in interest rates Sensitivity of option price to changes in underlying asset price Sensitivity of option price to volatility changes Sensitivity of option price to time decay None 10. The primary benefit of a swap is to: Speculate on price movements Hedge against price or interest rate fluctuations Generate arbitrage profits . Increase exposure to market risks None 11. Which of the following is a primary motive for mergers? Increased market sha Increased market share Diversification Cost synergies All of the above None 12. In a merger, synergy is achieved when: Combined value > Sum of individual values Combined value < Sum of individual values Combined value = Sum of individual values None of the above None 13. The post-merger earnings per share (EPS) of a company is calculated to measure: Profitability improvement Shareholder return Impact on financial structure Market reaction to the merger None 14. Which method is not used for business valuation? Discounted Cash Flow (DCF) Comparable Companies Method Residual Income Method Ratio Analysis None 15. Leveraged buyouts are primarily financed through: Equity Internal reserves Debt Asset sales None 16. Which factor is most critical in determining foreign exchange rates in the long term? Government policies Purchasing Power Parity Speculative activities Short-term capital flows None 17. What is the primary purpose of a letter of credit in international trade? To reduce currency risk To ensure payment to the seller To hedge against price fluctuations To eliminate tariff barriers None 18. The technique of matching foreign currency inflows with outflows is called: Forward Hedging Currency Swapping Natural Hedging Speculation None 19. In exchange rate quotations, a "direct quote" means: Foreign currency per unit of domestic currency Domestic currency per unit of foreign currency Spot exchange rate Forward exchange rate None 20. If a U.S. firm expects to receive €500,000 in 3 months, which derivative is best to hedge this risk? Put Option on Euro Call Option on Euro Forward Contract to Sell Euros Swap Agreement None 21. Which of the following is not a type of corporate restructuring? Divestiture Demerger Financial Leverage Spin-off None 22. In a financial reconstruction, the primary goal is to: Maximize shareholder wealth Minimize capital structure costs Address solvency issues Expand operations None 23. A poison pill is a: Strategy to attract merger partners Defense mechanism against hostile takeovers Tax incentive for restructuring Financial term for loss-making units None 24. The debt-equity swap is commonly used in: Leveraged buyouts Corporate turnaround strategies Mergers and acquisitions International trade settlements None 25. Which of the following is a key characteristic of a spin-off? It creates a new independent company It reduces the number of shareholders It merges two unrelated businesses It is a hostile acquisition tacti None 26. Which theory supports the irrelevance of dividend policy in a perfect market? Walter's Model Gordon’s Model Modigliani-Miller Hypothesis Residual Theory of Dividends None 27. A stable dividend policy is one where: Dividends fluctuate with profits Dividends remain constant or change gradually Dividends are declared only in profitable years All earnings are retained None 28. The clientele effect suggests that: Investors prefer high-dividend-paying firms Dividend policies attract specific investor groups Firms with no dividends are undervalued Share prices depend only on earnings None 29. The payout ratio is calculated as: Dividends / Net Sales Dividends / Net Profit Retained Earnings / Total Equity Dividends / Total Assets None 30. Which of the following is not a determinant of dividend policy? Earnings Stability Market Capitalization Liquidity Position Legal Constraints None 31. The cost of retained earnings is equivalent to: Cost of equity Cost of debt Weighted average cost of capital Cost of preference shares None 32. What does the weighted average cost of capital (WACC) represent? Average cost of equity and preference capital Minimum return required by investors Cost of debt capital Opportunity cost of retained earnings None 33. Which of the following is a financing decision? Product pricing Asset acquisition Capital structure choice Market penetration strategy None 34. What is the role of credit rating in financial management? Determine interest rates Assess company risk Improve capital structure Predict dividend policy None 35. A company uses a high proportion of debt in its capital structure. This is an example of: Operating Leverage Financial Leverage Combined Leverage None of the above None 36. A zero-coupon bond does not provide: Face value repayment Periodic interest payments Principal repayment Discount at issuance None 37. The formula for CAPM is: Ke = Rf + β(Rm - Rf) Ke = Rf × β × Rm Ke = β × Rm Ke = Rf + Rm - β None 38. The primary goal of financial management is: Maximizing sales revenue Maximizing shareholder wealth Ensuring liquidity Minimizing operational costs None 39. The term "scrip dividend" refers to: Dividend paid in cash Dividend paid in shares Dividend paid in debentures No dividend paid None 40. The Z-score model is used to predict: Liquidity Bankruptcy Profitability Market capitalization None 1 out of 4 Great job on taking the INCOC Test! We appreciate your interest in test.Look out for results and future opportunities.Stay Connected !! Your quiz time is about to finish. Few seconds left. 1 2 3 4 Time's upYou cannot switch tabs while taking this quiz!You are not allowed to switch tabs violation has been recorded.you cannot minimize full screen mode!You are not allowed to minimize full screen while taking this quiz, violation has been recorded.Access denied! To begin the quiz, please grant this quiz access to your camera.Time is Up!Time is Up!
