Sample Question of Fin110

1219 Words Nov 2nd, 2010 5 Pages
Section A (20 Multiple Choice Questions) (50 marks)

Select the appropriate response:

1. The primary financial goal of a corporation is to maximize

A Shareholder’s wealth B Earnings per share C Stock price D A & C

2. Which of the following is not one of the three major areas of finance?

A Accounting B Investments and financial markets C Financial management of companies D The banking system

3. A savings-surplus unit is one:

A that needs to borrow funds from a surplus unit B whose income exceeds its spending C whose spending exceeds its income D that generally is a company

4. A _______ is a financial intermediary that receives premium
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Calculate the one-year return on Songket stock

A 3.75% B 9.50% C 18.75% D 22.50% 16. If a project’s NPV is negative?

A The project earns less than the cost of capital B The investment will not add value or contribute to shareholder wealth C The present value of expected cash outflows is greater than the present value of expected cash inflows D All of the above

17. The cash conversion cycle measures the time

A Between the creation of receivables and their collection B It takes for inventory to be turned into product and sold C Between payment for inventory and collection of cash for its subsequent sale as product D For a check to clear the banking system

18. Which of the following is a source of a short-term financing?

A Accounts payable B Accruals C Commercial paper D All of the above 19. The followings are among the 5Cs of credit EXCEPT

A Character B Cooperation C Capacity D Collateral
20. Bursa Malaysia (Malaysia Stock Exchange) does all this EXCEPT A Be the market where securities that have already been issued are traded between investors. B Provide transferring ownership service to corporate securities C Being monitored by Bank Negara Malaysia and Ministry of Finance D Issue new securities

(20 x 2.5m = 50) SECTION B

Question 21 (15

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