Management Trainee Finance Exam Questions

Can you list me the questions for Management Trainee Finance Exam as my sister will be giving the exam and want it for preparation?

[Kiran Chandar]

The questions for Management Trainee Finance Exam as your sister will be giving the exam and want it for preparation are as follows:

Type of risk is avoidable through proper diversification.
portfolio risk
systematic risk
unsystematic risk
total risk

A statistical measure of the degree to which two variables (e.g., securities’ returns)
move together.
coefficient of variation
variance
covariance
certainty equivalent

An “aggressive” common stock would have a “beta”
equal to zero.
greater than one.
equal to one.
less than one.

A line that describes the relationship between an individual security’s returns and
returns on the market portfolio.
characteristic line
security market line
capital market line
beta

According to the capital-asset pricing model (CAPM), a security’s expected
(required) return is equal to the risk-free rate plus a premium
equal to the security’s beta.
based on the unsystematic risk of the security.
based on the total risk of the security.
based on the systematic risk of the security.

The risk-free security has a beta equal to, while the market portfolio’s beta is equal
to .
one; more than one.
one; less than one.
zero; one.
less than zero; more than zero.

Carrie has a “certainty equivalent” to a risky gamble’s expected value that is less than
the gamble’s expected value. Carrie shows
risk aversion.
risk preference.
risk indifference.
a strange outlook on life.

Beta is the slope of
the security market line.
the capital market line.
a characteristic line.
the CAPM.

A measure of “risk per unit of expected return.”
standard deviation
coefficient of variation
correlation coefficient
beta

The greater the beta, the of the security involved.
greater the unavoidable risk
greater the avoidable risk
less the unavoidable risk
less the avoidable risk

Select correct option:
Sales variability
Level of fixed operating costs
Closeness to its operating break-even point
Debt-to-equity ratio

What is the expected return of a zero-beta security?
The risk-free rate
Zero rate of return
A negative rate of return
The market rate of return

The objective of financial management is to maximize _________ wealth.
Stakeholders
Shareholders
Bondholders
Directors

Which of the following formulas represents a correct calculation of the degree of
operating leverage?
(Q – QBE)/Q
(EBIT) / (EBIT – FC)
[Q(P-V) + FC] /[Q(P-V)]
Q(P-V) / [Q(P-V) - FC]

Which of the following is a capital budgeting technique that is NOT considered as
discounted cash flow method?Select correct option:
Payback period
Internal rate of return
Net present value
Profitability index

When taxes are considered, the value of a levered firm equals the value of the________.
Unlevered firm
Unlevered firm plus the value of the debt
Unlevered firm plus the present value of the tax shield
Unlevered firm plus the value of the debt plus the value of the tax shield

At the termination of project, which of the following needs to be considered relating to
project assets?
Salvage value
Book value
Intrinsic value
Fair value

What is the most important criteria in capital budgeting?
Return on investment
Profitability index
Net present value
Pay back period

Which of the following is the cash required during a specific period to meet interest
expenses and principal payments?
Debt capacity
Debt-service burden
Adequacy capacity
Fixed-charge burden

Which of the following is the maximum amount of debt (and other fixed-charge
financing) that a firm can adequately service?
Debt capacity
Debt-service burden
Adequacy capacity
Fixed-charge burden

Which of the following shows ALL possible Risk –Return combinations for All
combinations of the stocks in the portfolio- whether efficient or not.
Parachute graph
Capital market line
Security market line
All of the given options

Which of the following factors might affect stock returns?
Business cycle
Interest rate fluctuations
Inflation rates
All of the above

The weighted average of possible returns, with the weights being the probabilities of
occurrence is referred to as __________.
Probability distribution
Expected return
Standard deviation
Coefficient of variation

Which of the following formulas represents a correct calculation of the degree of
operating leverage?
(Q – QBE)/Q
(EBIT) / (EBIT – FC)
[Q(P-V) + FC] /[Q(P-V)]
Q(P-V) / [Q(P-V) - FC]

Which of the following is as EBIT?
Funds provided by operations
Earnings before taxes
Net income
Operating profit

Total portfolio risk is a combination of:
Systematic risk plus non-diversifiable risk
Avoidable risk plus diversifiable risk
Systematic risk plus unavoidable risk
Systematic risk plus diversifiable risk

In which of the following approach you need to bring all the projects to the same
length in time?
MIRR approach
Going concern approach
Common life approach
Equivalent annual approach

Which of the following is NOT the form of cash flow generated by the investments of the
shareholders?
Income
Capital loss
Capital gain
Operating income

What are two major areas of capital budgeting?
Net present value, profitability index
Net present value; internal rate of return
Net present value; payback period
Pay back period; profitability index

Which of the following factors might affect stock returns?
Business cycle
Interest rate fluctuations
Inflation rates
All of the above

Which of the following is related to the use Lower financial leverage?
Fixed costs
Variable costs
Debt financing
Common equity financing

Who determine the market price of a share of common stock?
The board of directors of the firm
The stock exchange on which the stock is listed
The president of the company
Individuals buying and selling the stock

_________ is equal to (common shareholders’ equity/common shares outstanding).
Book value per share
Liquidation value per share
Market value per share
None of the above

Where the efficient stock combination of risk and return in efficient market should lie?
On the SML
Below the SML
Above the SML

It may lie anywhere for efficient combination
An annuity due is always worth _____ a comparable annuity.
Less than
More than
Equal to
Can not be found from the given information

Where the stock points will lie, if a stock is a part of totally diversified portfolio?
It will lie below the regression line
It will line above the regression line
It will line exactly on the regression line
It will be tangent to the regression line

What is the easiest method to diversify away firm-specific risks?
To buy stocks with a beta of 1.0
To build a portfolio with 5-10 individual stocks
To purchase the shares of a mutual fund
To purchase stocks that plot above the security market line

Nominal Interest Rate is also known as:
Effective interest Rate
Annual percentage rate
Periodic interest rate
Required interest rate

When taxes are considered, the value of a levered firm equals the value of the________.
Unlevered firm
Unlevered firm plus the value of the debt
Unlevered firm plus the present value of the tax shield
Unlevered firm plus the value of the debt plus the value of the tax shield

Which of the following is correct regarding the opportunity cost of capital for a project?
The opportunity cost of capital is the return that investors give up by investing in the
project rather than in securities of equivalent risk.
Financial managers use the capital asset pricing model to estimate the opportunity
cost of capital
The company cost of capital is the expected rate of return demanded by investors in a
company
All of the given options

For which of the following costs is it generally necessary to apply a tax adjustment to a
yield measure?
Cost of debt
Cost of preferred stock
Cost of common equity
Cost of retained earnings

Which of the followings expressed the proposition that the cost of equity is a positive
linear function of capital structure?
The Capital Asset Pricing Model
M&M Proposition I
M&M Proposition II
The Law of One Price

The current yield on a bond is equal to ________.
Annual interest divided by the current market price
The yield to maturity
Annual interest divided by the par value
The internal rate of return

Hello friend myself Akhilesh provide me the Management Trainee Finance Exam Questions?

[Raman Vij]

Hello here I am providing you Management Trainee Finance Exam Questions on your demand…………


PART I
1. According to Accounting Standard -6, depreciation is to be provided on the
basis of
a) Historical cost of the Assets
b) Market price of the Assets
c) Replacement cost of the Assets
d) None of above

2. Sale of inventory for cash will cause the current ratio to
a) Increase
b) Decrease
c) Remain unchanged
d) None of above

3. Issue of Share Capital in consideration to purchase of Plant & Machinery result
into
a) Source of funds
b) Application of funds
c) No flow of funds
d) None of above

4. Which of the following option do not pose a burden on the finance of the
Company
a) Public deposit
b) Debentures
c) Loans from Financial Institutions
d) Retained Earnings
e) None of above

5. The limited review report by the auditors has to be provided within :
a)One month from the end of quarter
b)Two months from the end of the quarter
c)Oneand half months from the end of the quarter
d)Three months from the end of the quarter
e) None of above

6.The effective income tax rate on the corporate dividend distribution at present is :
a)16.5
b)16.995
c)11
d)11.30
e) None of above

7. The certificate for compliance of Corporate Governance requirements is issued under
which clause of listing agreement :
a)Clause-41
b) Clause-46
c)Clause-49
d)Clause-50
e) None of above

8.When an amount of Rs.10,00,000 as initial outflow in a project by company has resulted
in an inflow of Rs.1,21,0000 after two years, what is the IRR of this project:
a)21%
b)10%
c)10.50%
d)9.5%
e) None of above

9. Three copies of the accounts of the company are to be filed with the registrar of
companies within …………… …from the date of their approval in the AGM :
a)15 days
b) 60 days
c)45 days
d)30 days
e) None of above

10. How may zeros are there in a billion :
(1)8
(2)9
(3)10
(4)11
(5)12

11. Fixed Deposit are shown in the Balance Sheet of a Company under the head:-
a)Secured Loan
b)Unsecured Loan
c)Current Liability
d)Contingent Liability
e) None of above

12. Record date declared by a company is basically for the purpose of
a) Declaration of dividend
b) Board of directors meeting
c) Repayment of loan
d) Appointment of Managing Director
e) None of above

13. The accounts of a company has to be filed with the registrar of companies within
30 days from the date of :
a) Its approval by Board of directors
b)Submission of Auditors’ report
c) Its approval in Annual General Meeting
d) Signing of Accounts
e) None of above

14. The report of the Statutory Auditors in a Government Company is addressed to :
a) Board of Directors
b) Chairman of Company
c) C&AG of India
d) Shareholders
e) None of above

15. The accounting standard related to cash flow statement is :
a)AS-4
b) AS-10
c)AS-3
d)AS-7
e) None of above

16. The AS-15 issued by ICAI is related to :
a)Accounting for Amalgamations
b)Accounting for investment
c)Employee Benefits
d)Borrowing Cost
e) None of above

17. The rate of income tax on the long term capital gain earned on the sale of equity
shares listed with stock exchanges during Assessment year 2008-09 is :
a)20% b)10% c)5% d)25% e) None of above

18. In CARO for internal audit purpose the amount of paid up share capital and reserves
exceeding …………. has been specified :
a)Rs.5 crore b)Rs.2 crore c)Rs.1 crore d)Rs.0.50 crore e) None of above

19. Under Companies Act, 1956 every public company having paid up share capital of
not less than Rs…………….. crore shall constitute a committee of board called audit
committee :
a)Rs.10 crore b)Rs.7.50 crore c)Rs.5 crore d)Rs.2 crore (5) None of above

20. In case of a company the directors responsibility statement under Section 217 of the
Companies Act, 1956 is to be stated in :
a)Notes on Accounts b)Directors’ Report c)Memorandum and Articles of Association
d)Corporate Governance Report e) none

PART II
1. The currency of North Korea is :
a. Yuan b. Won
c. Yen d. Kip
e. None of above

2. The invention and discovery of dynamite is related to the name of :
a. Alfred Nobel b. Faraday
c. Edison d. Volta
e. None of above

3. The Union Minister of Commerce and Industry is
a. P. Chidambaram b. Kamal Nath
c. Sharad Pawar d. None of these
e. None of above

4. India’s anti tank missile is
a) Akash
b) Nag
c) Agni
d) Prithvi
e) None of above

5. The currency of Indonesia is
a) Dollar
b) Rapiah
c) Lira
d) Rupee
e) None of above

6. Who won the Wimbledon men’s singles in 2007?
a) Rafal Nadal
b) Mike Bryan
c) Roger Federer
d) Fabrice Santro
e) None of above

7. Lumbini is a sacred place of the
a) Muslims
b) Buddhists
c) Christians
d) Sikhs
e) None of above

8. Firing in Jallin Wala Bagh was ordered by
a) O’Dwyer
b) Rowlatt
c) Curzon Wyllie
d) Lord Simon
e) None of above

9. The layer of atmosphere close to Earth’s surface is called
a) Exosphere
b) Ionosphere
c) Stratosphere
d) Troposphere
e) None of above

10. Earth quakes are caused by
a) Earth’s rotation
b) Denudation
c) Tectonism
d) Earth revolution
e) None

11. Helsinki is the Capital of
a) Finland
b) Norway
c) Denmark
d) Sweden
e) None of above

12. Light year is related to
a) Energy
b) Distance
c) Speed
d) Intensity
e) None of above

13. A.D. stands for
a) After Christ
b) Anno Domini
c) Aide-de
d) None of above

14. The first General Election were held in India in
a)1951-52
b) 1950-51
c)1949-
d)1948-49
e) None of above

15. When it is 5.30 p.m. in India, it is ………… in London
a) 12.00 noon
b) 5.00 a.m.
c) 10.00 a.m.
d) 11.00 p.m.
e) None of above

16. The highest percentage in the atmosphere is of
a) Oxygen
b) Nitrogen
c) Carbon dioxide
d) Helium
e) None of above

17. Who wrote “Jungle Book”?
a) Mohd Salim
b) Rudyard Kipling
c) Sibhu
d) Rajender Prasad
e) None of above

18. 15th August is Independence day of India and
a) South Korea
b) Indonesia
c) China
d) Pakistan
e) None of above

19. When is the World AIDS Day observed all over the world?
a) 1st October
b) 12th December
c) 1st December
d) 13th November
e) None of above

20. The second women of India Origin to go into space after Kalpna Chawla is :
a) Anita Williams
b) Sunita Williams
c) Anoushah Ansari
d) Radhika Sharma
e) None of above

PART III
1. As per the speaker, where did the national consciousness first emerge ?
(a) Rome (b)Europe (c)Asia (d) Africa (e) None of above

2. The speaker believes
(a) Africa can be isolated from the worldwide emergence of national
consciousness
(b) Africa is already witnessing the emergence of national consciousness
(c ) That the political system must get ready to oppress the emergence of
national consciousness
(d) None of the above

3. The tone of this speech is
(a) Retaliatory (b) Explanatory (c) Conciliatory (d) None of the above

4. A suitable title for the above passage would be
(a) Winds of change (b) Emergence of nationalism (c)Shaping of policies
(d) None of the above

5. Fire : Ashes
a) Movie : Queues
b) Accident : Wreckage
c) Surim : Wet clothes
d) Wood : Splinters
e) None of above

6. Plaintiff : Defendant
a) Court : Law
b) Judge : Jury
c) Injured : Accused
d) Explosive : Volcano
e) None of above

7. Winter : Snow
a) Summer : Heat
b) Monsoon : Rain
c) Autumn : Trees
d) Field : Grass
e) None of above

8. Government ; Exile
a) Police : arrest
b) Judge : Convict
c) Constitution : Amendment
d) Church : excommunicate
e) None of above

9. Tax ; exemption
a) Fine : Payment
b) Disease : immunity
c) Trial : forfeit
e) Crime : punishment
f) None of above

10. HUNKY DORY
(a) Persuade (b) Forgo (c) Disagree (d) All right
(e) None of above

11. RESCIND
(a) Cancel (b) Enjoy (c )Praise
(d )Receive (e) None of above

12. COLLATERAL
(a) Pathetic (b) Tiresome (c) Guarantee
(d) Magnanimous (e) None of above

13. Adept
(a) Versatile (b) Skilful (c) Smart
(d) Effortless (e) None

14. Limpid
(a) Moist (b) dear (c) Drooping
(d) flimsy (e) None

15. SAGE
(a) Miser (b) Fool (c) Traitor (d) Tyrant
(e) None of above

16. ANIMATED
(a) Penetrating (b) Modern (c) Dull (d) Similarity
(e) None of above

17. ILLUSIVE
(a) Not brilliant (b) Not coherent (c) Not deceptive (d)Not obvious
(e) None of above

18. Proximate
(a) Distant (b) Near (c) Non-Transferable (d)Insincere (e) None of
above

19. Sycophancy
(a) Frankness (b) Explain (c) Wicked (d) Covetous
(e) None of above

20. In her ……………………. she followed the …………………….course of action
(a) ignorance, wrong
(b) agony, fury
(c) bewilderment, appropriate
(d) hurry, diversified
(e) None of above

21. Sujata’s ………………..in athletics reaped rich………………….. for she finally
bagged a gold medal.
(a)performance, money (b)defeat, resources
(c)behaviour, result (d)excellence, dividends (e) None of above

22. Aarathi is hardly the young lady to do ……………………… to her husband
(a)credit (b)harm (c)damage (d)reputation (e) None of above

23. Tony enjoys ……………………… the school boys playing in the playground
(a)looking to (b)looking about (c)looking at (d) looking on
(e) None of above

24. To the dismay of all the students, the class monitor was _____ berated by the Principal at a
school assembly.
(a) critically (b) ignominiously (c) prudently
(d) fortuitously (e) None of above


PART-IV
1. Write short note on the following : ( 5 marks each)
a) Working Capital
b) Debt Service Coverage ratio
c) Cost of capital
d) MAT

2. Answer the following questions : ( 8 Marks each)
a) Provisions of Listing agreement for publishing un-audited quarterly results
b) Prior Period Adjustments and its treatment in accounts
c) Audit Committee requirements for Indian Companies

3. What are the various methods that can be adopted by a company for evaluation of a
new project. (8 Marks )

4. What are the provisions of Companies Act for preparation of accounts of a
company. (8 Marks)

5. Differentiate between : (10 Marks Each)
a) Internal and Statutory audit
b) Current tax and deferred tax
c) Operating and Financial Leverage
d) Funds flow and Cash flow statement