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. Which of the following is a primary objective of financial management? Maximization of wealth Maximization of profit Minimization of cost Maximization of assets None 2. Corporate strategy refers to: Long-term planning for operations Allocation of financial resources Broad plans for achieving corporate objectives Tactical marketing decisions None 3. The financial manager's role includes which of the following? Marketing analysis Maximizing shareholder wealth Political campaign management Administrative support functions None 4. The payback period is a measure of: Profitability Liquidity Risk assessment Dividend capacity None 5. Which of the following is considered a limitation of NPV? It considers the time value of money It ignores cash inflows It is not suitable for mutually exclusive projects It depends on an appropriate discount rate None 6. Internal Rate of Return (IRR) is defined as: The discount rate that equates NPV to zero The cost of equity capital The break-even point for a project The weighted average cost of capital None 7. Sensitivity analysis in project appraisal involves: Measuring changes in output with respect to changes in input Determining cash flows Calculating break-even levels Assessing operational efficiencies None 8. Which of the following methods is used to account for risk in capital budgeting? Linear regression Standard deviation Monte Carlo simulation Weighted average method None 9. Factoring is primarily associated with: Inventory management Receivables management Cash management Asset acquisition None 10. A leasing arrangement that transfers substantially all risks and rewards of ownership is termed as: Operating lease Financial lease Non-binding lease Spot lease None 11. The P/E ratio is used to calculate: Cost of equity Market capitalization Company valuation Liquidity position None 12. The book value of a company is calculated by: Subtracting liabilities from assets Multiplying market price by EPS Adding dividends to retained earnings Dividing net income by total assets None 13. A forward contract is: Standardized and traded on exchanges Tailored and privately negotiated A spot market transaction Irrelevant to risk management None 14. The beta of a stock measures: Systematic risk Unsystematic risk Total risk Credit risk None 15. A put option gives the holder the right to: Buy an asset at a fixed price Sell an asset at a fixed price Exchange an asset for cash Lease an asset None 16. Hedging is primarily used to: Increase leverage Eliminate risk Reduce exposure to risk Enhance profitability None 17. Which of the following is a motive for holding cash? Speculative motive Trading motive Deficit motive Capital motive None 18. A higher current ratio indicates: Greater liquidity Higher profitability Efficient asset utilization Increased solvency None 19. The residual theory of dividends states that: Dividends should always be paid Dividends should be paid after all profitable investments are made Dividends should be constant Dividends depend on retained earnings None 20. Stock splits are used to: Increase the market value of shares Reduce the market value of shares Increase retained earnings Enhance the firm’s profitability None 21. The weighted average cost of capital (WACC) is calculated using: Book values of debt and equity Market values of debt and equity placement cost of debt and equity Nominal values of debt and equity None 22. Cost of retained earnings is equivalent to: Cost of debt Cost of equity Weighted average cost of capital Cost of preferred stock None 23. Modigliani-Miller (MM) hypothesis assumes: The presence of bankruptcy costs Perfect capital markets Tax advantages for equity financing Asymmetric information None 24. The optimal capital structure minimizes: Operating costs Weighted average cost of capital (WACC) Debt-to-equity ratio Shareholder equity None 25. A horizontal merger involves companies that: Operate at different stages of production Produce complementary goods Operate in the same industry and market Belong to unrelated industries None 26. In a merger, the synergy benefit arises from: Higher taxation Cost savings and increased revenue Increased debt servicing Reduction in shareholder equity None 27. A direct quotation in foreign exchange is: Foreign currency per unit of domestic currency Domestic currency per unit of foreign currency Exchange rate adjusted for inflation Cross-currency exchange rate None 28. Interest rate parity (IRP) theory explains: The relationship between spot rates and forward rates Inflation effects on foreign exchange Arbitrage opportunities in commodities Equity market integration None 29. Diversification reduces: Systematic risk Unsystematic risk Total risk Beta None 30. The Capital Asset Pricing Model (CAPM) calculates: Expected portfolio return Cost of capital c) Weighted Average Return Weighted Average Return Risk-free premium None 31. Real options in capital budgeting refer to: Tangible asset investments Financial derivatives Managerial flexibility to adapt decisions Fixed cash flows in projects None 32. The profitability index (PI) is defined as: NPV divided by initial investment IRR minus the discount rate Initial investment divided by NPV Total cash inflows divided by total cash outflows None 33. The primary goal of working capital management is to: Minimize inventory levels Maximize liquidity Ensure adequate cash flow for operations Reduce debt obligations None 34. The operating cycle is defined as: The time between cash payment for raw materials and cash collection from sales The duration of a production run The interval between sales and profit realization The average time taken for account reconciliation None 35. A swap agreement involves: The right to buy or sell an asset at a future date The exchange of cash flows between two parties Hedging against currency fluctuation Arbitrage in equity markets None 36. The value of a derivative is derived from: Arbitrage opportunities Underlying asset value Fixed income securities Market speculation None 37. A high dividend payout ratio is typically preferred by: Growth-oriented investors Income-oriented investors Speculative investors Risk-averse investors None 38. Value at Risk (VaR) is a measure of: Expected return Maximum probable loss Total portfolio value Market capitalization None 39. Exposure at Default' (EAD) in credit risk refers to: The likelihood of a borrower defaulting The amount expected to be outstanding at the time of default The interest rate charged on loans The total assets of the borrower None 40. The clientele effect refers to: The impact of dividend policy on investor preference The increase in market share due to strategic mergers The relationship between share price and company earnings Investor response to corporate restructuring 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. 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