Financial Management Interview Questions
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Questions on Financial Management
1. Penetration pricing of a product of a firm implies:
(A) low initial price followed by a high price
(B) high initial price followed by a low price
(C) moderate price of a product
(D) fluctuating price of a product
2. Which role in a group setting contributes to the social-emotional bonding of members and the groups overall success?
(A) facilitative or building role
(B) individualizing
(C) maintenance
(D) blocking
3. Which of the following is not a hypothesis put forward to explain the rationale for issuing bonus shares and stock splits?
(A) Signalling hypothesis
(B) Trading range hypothesis
(C) Attention hypothesis
(D) Alternate hypothesis
4. …………………describes changes in an individual consumer behaviour arising from experience.
(A) Modeling
(B) Perception
(C) Learning
(D) Motivation
5. A problem can be considered as Linear Programming Problem, if and only if it has:
(1) Objective function
(2) Constraints
(3) Alternative courses of Action
(4) Latest Technology
(A) (1) only
(B) (1) and (2)
(C) (1), (2) and (3)
(D) (1), (2) and (4)
6. Management Information System usually:
(I) Provides managers with a generalised computing and telecommunications strategy for problem solving
(II) Serves managers interested in weekly, monthly and yearly results on various performance parameters
(III) Performs and records daily routine transactions necessary for conducting business
(A) (I) only
(B) (II) only
(C) (III) only
(D) (I) and (II)
7. In which of the following types of ownership there is no distinction between the business entity and the owner(s):
(A) Company limited by shares
(B) The co-operative organization
(C) Proprietorship
(D) Joint stock company
8. Select the correct option: Sarbanes–Oxley Act, 2002 emphasises on:
(A) Environmental Protection
(B) Work-life Balance
(C) Total quality Management
(D) Audit function and Financial disclosures
9. Which of the following is not a “Public Relations Function”?
(A) Assess the corporate reputation
(B) Audit C.S.R.
(C) Conduct positive image building activities
(D) Identify prospective customers
10. When there is an official increase in exchange rate of the Indian rupee, then it is called………………….. .
(A) Appreciation
(B) Deflation
(C) Depreciation
(D) Revaluation
11. In case the company goes into liquidation, which of the following is repayable first?
(A) Equity capital
(B) Redeemable preference capital
(C) Cumulative preference capital
(D) Debentures
12. Which type of unemployment takes place in the economy when there is a business downward?
(A) Frictional unemployment
(B) Structural unemployment
(C) Cyclical unemployment
(D) Unstructured unemployment
13. Which is the part of every interpersonal relationship?
(A) Conflict
(B) Love
(C) Stress
(D) Communication
14. The basic objective of financial management is:
(A) Maximisation of profits
(B) Maximisation of shareholder’s wealth
(C) Ensuring financial discipline in the organisation
(D) Ensuring returns to debenture-holders
15. Which of the following methods is the most appropriate measure for cost reduction investment projects with unequal lives?
(A) Equivalent annual cost
(B) Equivalent annual NPV
(C) Equivalent present value index
(D) Capital rationing
16. ………………………….is defined as the difference between the benefits a customer sees from a market offering and the costs of obtaining those benefits.
(A) Profit margin
(B) Surplus
(C) Customer value
(D) Consumer surplus
17. Which of the following is not an application of Markov Analysis?
(A) Brand switching analysis
(B) Accounts receivables problem
(C) Optimal maintenance policy
(D) Product mix decisions
18. The number of telephone calls received per day to a particular telephone number can be best modelled by using the:
(A) Binomial distribution
(B) Uniform distribution
(C) Poisson distribution
(D) Normal distribution
19. Fill in the blank spaces: Ultimately………………………was replaced by the………………………..on Jan. 1, 1995.
(A) G.A.T.T., W.T.O.
(B) W.T.O., G.A.T.T.
(C) G.A.T.S., W.T.O.
(D) I.M.F., G.A.T.T.
20. “Franchising” is an example of:
(A) Imitation strategy
(B) Innovation strategy
(C) Broad scope strategy
(D) Market scope strategy
21. Choose the correct option:
Industrial Policy (1956) declared by the Government of India aimed at establishing:
(A) Capitalistic economy
(B) Socialistic pattern of society
(C) Mixed economy
(D) Democratic economy
22. An adult worker under the Factories Act, 1948 is eligible for leave with wages @ 1 day for every………………… days worked during the preceding year.
(A) 50
(B) 20
(C) 15
(D) 240
23. How can the government of a country reduce its deficit in the BOP for arresting imports and stimulating exports?
(A) Depreciation
(B) Deflation
(C) Devaluation
(D) Inflation
24. Under the traditional distribution structure in International Marketing, which of the following controls a fixed supply of goods that are sold as high prices to a small group of customers?
(A) Exporter
(B) Cartel
(C) Importer
(D) Manufacturer
25. In which market category is resource mobility assumed?
(A) Monopoly.
(B) Oligopoly.
(C) Perfect competition.
(D) Monopolistic competition.
26. Which of the following is not a fixed cost?
(A) Payment of interest on borrowed capital.
(B) Charges for fuel and electricity.
(C) Depreciation charges.
(D) Contractual rent for equipment.
27. New Economic Policy 1991 does not cover:
(A) Liberalisation measures
(B) Macroeconomic reforms
(C) Structural adjustments
(D) Agricultural reforms
28. If the demand for petrol remains almost same even after increase in petrol prices, it means petrol has:
(A) Highly elastic demand
(B) Unitary elastic demand
(C) Relatively inelastic demand
(D) Infinitely inelastic demand
29. Cost functions are derived functions. They are derived from:
(A) Demand functions
(B) Supply functions
(C) Production functions
(D) Isoquant functions
30. Neo-Classical theory focusses attention on:
(A) Employees
(B) Management
(C) Welfare of employees
(D) Bargainable employees
31. The first stage of conflict resolution is to:
(A) Analyse the problem
(B) Choose a solution
(C) Think through possible solutions
(D) Define the problem
32. Autocratic leadership:
(A) requires task completion
(B) works with consensus of all
(C) does not accept views and suggestions of all
(D) demands obedience from authorities
33. Mayo’s studies at the Hawthorne plant made valuable contributions about:
(A) Formal Organisation
(B) Formal Work Group
(C) Informal Organisation
(D) Formal Communication
34. One of the main purposes of horizontal communication is:
(A) Problem-Solving
(B) Morale booster
(C) Give feedback to the top
(D) Provide job instructions and information
35. Trade Union cannot represent legally if it is:
(A) not registered
(B) not recognised
(C) led by political leader
(D) working for multiple industries
36. The doctrine of Management By Objectives is introduced by:
(A) Peter Drucker
(B) Elton Mayo
(C) Henri Fayol
(D) D. McGregor
37. Fair wage is defined as:
(A) Monthly wage paid with Dearness Allowance
(B) Wage that is lower than living wage but more than minimum wage
(C) Wages paid with incentive
(D) Fair wage includes all allowances
38. Self-assessment is a part of:
(A) Interview followed by written test
(B) Competency mapping
(C) Induction
(D) Performance Appraisal System
39. Labour Turnover is:
(A) The rate of change in the working staff of a concern during a definite period
(B) Number of Employees joining the organization
(C) Number of Employees promoted during a year
(D) Number of Employees transferred to other departments
40. Which of the following is a non-DCF technique:
(A) NPV
(B) IRR
(C) ARR
(D) PI
41. The market price per share of the firm having equity capital of Rs. 1,00,000 (face value of Rs. 50 per share); profit after taxes of Rs. 12,000 and P/E ratio of 5 will be:
(A) Rs. 30
(B) Rs. 250
(C) Rs. 60
(D) Rs. 20
42. The degree of operating leverage is a measure of:
(A) Financial risk
(B) Business risk
(C) Country risk
(D) Systematic risk
43. Poison pill is used in:
(A) Hostile takeover
(B) Merger
(C) Amalgamation
(D) Restructuring
44. A bond can be issued at a premium, if:
(A) Coupon rate > required returns
(B) Coupon rate < required returns
(C) Coupon rate = required returns
(D) Face value > Rs. 100
45. The DAGMAR Approach helps to:
(A) Decide on Product Features
(B) Prepare Promotion Budget
(C) Create Marketing Messages
(D) Measure Advertising Effectiveness
46. The ………………………. is the central instrument for directing and coordinating the marketing effort.
(A) Tactical marketing plan
(B) Mission statement
(C) Growth matrix
(D) Strategic marketing plan
47. Which of the following is not a characteristic of marketing audit?
(A) Concise
(B) Comprehensive
(C) Independent
(D) Periodic
48. Post purchase cognitive dissonance refers to:
(A) Gap between expectations and performance
(B) Performance exceeding expectations
(C) Positive word of mouth
(D) Repeat purchase behaviour
49. Pricing objectives include all except:
(A) Target Return
(B) Temporary Discounts
(C) Unit Sales Growth
(D) Meeting Competition
50. Decision theory helps management in:
(A) Analysing a problem
(B) Deciding sequence of activities
(C) Selecting the most cost effective alternative
(D) Postpone administrative action
