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Fundamentals of Finance

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Quiz-01: Quiz on Introduction

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1. 1. What do you mean by finance?
Finance is the art and science of managing money Managing assets Inventory management Financial recourse management
2. 2. Which of the following is the primary goal of finance?
To Maximize the return To Minimize the risk To maximize profit To maximize the wealth of owners
3. 3. What is the managerial function of a financial manager?
Investment decision Cash management Forecasting future profit Financial controls
4. 4. What is the routine function of a financial manager?
Protection of capital Investment decision Financing decision Dividend decision
5. 5. Why profit maximization is not a reasonable goal?
It ignores time value of money It considers risk It considers time value of money It considers cash flow
6. 6. Which of the following is the rationales of wealth maximization?
It ignores time value of money It considers risk It ignores risk Ambiguity
7. 7. What is agency problem?
Conflict of interest between shareholder and bond holder Conflict of interest between creditor and manager. Conflict of interest between principal and owner Conflict of interest between shareholder and manager.
8. 8. What is agency cost?
Cost which is incurred due to the organizational problem Cost which is incurred due to the money problem Cost which is incurred due to the agency problem Cost which is incurred due to the management problem
9. 9. Which of the following is the mechanisms for motivating managers to act in shareholders' best interests?
Monitoring Managerial compensation Keeps interest for owners Opportunity expenditures
10. 10. Which of the following is the principles of business finance?
Profitability & liquidity Sources identification Cash management Forecasting cash flow