Ch-1 Quiz 2 Financial Management

Reviewed by Editorial Team
The ProProfs editorial team is comprised of experienced subject matter experts. They've collectively created over 10,000 quizzes and lessons, serving over 100 million users. Our team includes in-house content moderators and subject matter experts, as well as a global network of rigorously trained contributors. All adhere to our comprehensive editorial guidelines, ensuring the delivery of high-quality content.
Learn about Our Editorial Process
| By Swatimehta2210
S
Swatimehta2210
Community Contributor
Quizzes Created: 1 | Total Attempts: 446
| Attempts: 449
Quiz Flashcard
SettingsSettings
Please wait...
  • 1/10 Questions

    Which is not main function of finance manager?

    • Investment decision
    • Working capital decision
    • Dividend decision
    • Planning the material
Please wait...
About This Quiz

Ch-1 QUIZ 2 in FINANCIAL management assesses key concepts such as investment decisions, financing options, and liquidity management. It evaluates understanding of financial manager roles and optimal capital structures, crucial for maximizing market value.

Ch-1 Quiz 2 Financial Management - Quiz

Quiz Preview

  • 2. 

    Financial Management is mainly Concerned with ??????

    • Procurement of fund

    • Effective utilisation of fund

    • Wealth maximisation 

    • All above

    Correct Answer
    A. All above
    Explanation
    Financial management is the process of planning, organizing, directing, and controlling the financial activities of an organization. It encompasses various aspects, including the procurement of funds, effective utilization of funds, and wealth maximization. Procurement of funds involves obtaining the necessary capital to meet the organization's financial needs, while effective utilization of funds focuses on allocating and managing these funds efficiently to achieve the organization's objectives. Wealth maximization aims to increase the value of the organization and its shareholders' wealth. Therefore, financial management is concerned with all of the above aspects.

    Rate this question:

  • 3. 

    Optimum capital structure

    • Market value of share maximum

    • Risk minimum

    • High dividend

    • Cut off rate

    Correct Answer
    A. Market value of share maximum
    Explanation
    The optimum capital structure refers to the ideal combination of debt and equity financing that maximizes the market value of a company's shares. By achieving the maximum market value of shares, a company can attract more investors and increase its overall value. This can be achieved by minimizing the risk associated with the capital structure, as lower risk tends to attract more investors. Additionally, a high dividend payout can also contribute to increasing the market value of shares, as it indicates profitability and attracts income-seeking investors. The cut-off rate is a reference to the minimum acceptable return on investment, which should be considered when determining the optimum capital structure.

    Rate this question:

  • 4. 

    Theory of Portfolio Management theory was developed by .......

    • Modigliani & Millar

    • Soloman

    • Phillipts

    • Harry Markowitz

    Correct Answer
    A. Harry Markowitz
    Explanation
    The correct answer is Harry Markowitz. He is known for developing the theory of portfolio management, which revolutionized the field of finance. Markowitz's theory emphasizes the importance of diversification and the trade-off between risk and return in constructing an investment portfolio. His work laid the foundation for modern portfolio theory and earned him the Nobel Prize in Economics in 1990.

    Rate this question:

  • 5. 

    Investment Decision is related 

    • Working capital

    • Capital assets

    • Current assets

    • Current liabilities

    Correct Answer
    A. Capital assets
    Explanation
    Investment decision is related to capital assets. This is because investment decisions involve allocating funds towards the acquisition or expansion of long-term assets, such as buildings, machinery, equipment, or technology, that are expected to generate future income or provide long-term benefits to the organization. These capital assets are typically held for a longer duration and play a crucial role in the company's operations, productivity, and growth.

    Rate this question:

  • 6. 

    Financing Decision is related with

    • Provide finance to activities

    • Identify different sources of funds

    • Dividend payment

    • Short term liabilities

    Correct Answer
    A. Identify different sources of funds
    Explanation
    The financing decision is related to identifying different sources of funds for a company. This decision involves determining how the company will raise capital to finance its activities. It includes evaluating various options such as taking on debt, issuing equity, or seeking external funding. By identifying different sources of funds, the company can make informed decisions about the most suitable and cost-effective ways to finance its operations and investments.

    Rate this question:

  • 7. 

    Transitional Phase is not included 

    • Procurement of fund

    • Effective utilization of fund

    • Working capital  requirement

    • Day to day problems of finance

    Correct Answer
    A. Effective utilization of fund
    Explanation
    The given options are related to finance and funding. The correct answer, "effective utilization of fund," refers to the proper and efficient use of funds. This means that it is important to ensure that funds are used in the most effective way possible to achieve the desired outcomes and goals. It involves making strategic decisions on how to allocate and invest funds to maximize their impact and generate the desired returns or benefits. This is crucial for the financial success and sustainability of any organization.

    Rate this question:

  • 8. 

    What feature is added in modern phase  that other phases had not included........

    • Mobilization of fund

    • Effective utilization of fund

    • Working capital requirement

    • Day to day problems

    Correct Answer
    A. Effective utilization of fund
    Explanation
    In the modern phase, the feature of effective utilization of funds is added, which was not included in the other phases. This means that in the modern phase, there is a focus on ensuring that the funds available are utilized efficiently and effectively to achieve the desired goals and objectives of the organization. This involves careful planning, monitoring, and controlling of the funds to maximize their impact and avoid any wastage or misuse. By emphasizing effective utilization of funds, organizations can optimize their financial resources and improve overall performance.

    Rate this question:

  • 9. 

    Traditional Phase of FM is related with effective utilisation of fund

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The traditional phase of FM is not related to the effective utilization of funds. The traditional phase focuses on the basic functions of financial management, such as financial planning, budgeting, and financial control. It does not specifically address the effective utilization of funds, which is more commonly associated with the modern phase of FM.

    Rate this question:

  • 10. 

    Liquidity decision is related with???

    • Capital assets

    • Current assets

    • Fixed assets 

    • Net worth

    Correct Answer
    A. Capital assets
    Explanation
    The liquidity decision is related to capital assets because capital assets are long-term investments that cannot be easily converted into cash. When making liquidity decisions, a company needs to consider the availability and ease of converting their capital assets into cash to meet short-term financial obligations. Current assets, on the other hand, are more readily convertible to cash and are typically used to meet short-term obligations. Fixed assets and net worth are not directly related to liquidity decisions as they represent long-term investments and the overall value of a company, respectively.

    Rate this question:

Quiz Review Timeline (Updated): Jan 27, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Jan 27, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jun 24, 2020
    Quiz Created by
    Swatimehta2210
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.