This quiz works best with JavaScript enabled. Home > Class 11 > Class 11 Business Studies Chapter 7 Sources Of Business Finance – Quiz 7 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 7 (25 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. A firm has applied for a bank loan. The manager will ask all of the following questions except: A) How big is the loan needed?. B) How liquid is the business?. C) How long will the loan be needed for?. D) How powerful are the computers?. Show Answer Correct Answer: D) How powerful are the computers?. 2. Read each of the following statements and write if it is true or false:1. For the routine/daily requirements of business there is a need for the long-term finance. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 3. What is business finance primarily concerned with? A) Acquisition and conservation of capital funds. B) Employee management. C) Marketing strategies. D) Product development. Show Answer Correct Answer: A) Acquisition and conservation of capital funds. 4. Fixed Deposits are A) Short term source of finance. B) Medium term source of finance. C) Long term source of finance. D) None of the above. Show Answer Correct Answer: B) Medium term source of finance. 5. Which one of the following is not a feature of debentures? A) Specified maturity period. B) No voting right. C) Long term debt instruments. D) Variable return. Show Answer Correct Answer: D) Variable return. 6. Type of stock owned by voting members A) Income. B) Growth. C) Preferred. D) Common. Show Answer Correct Answer: D) Common. 7. Investor who want steady income may not prefer-? A) Debentures. B) Preference shares. C) Bonds. D) Equity shares. Show Answer Correct Answer: D) Equity shares. 8. When a bank asks for 'security' before agreeing to a bank loan it means that: A) The offices must be securely locked at night. B) Firm assets will be sold by the bank if the loan isn't paid. C) The assets purchased must be insured. D) None of the above. Show Answer Correct Answer: B) Firm assets will be sold by the bank if the loan isn't paid. 9. 'Opportunity cost' is related to ..... A) Equity shares. B) Preference shares. C) Debentures. D) Retained earnings. Show Answer Correct Answer: D) Retained earnings. 10. Why commercial papers can be issued only by large and creditworthy companies? A) It is an unsecured debt. B) It is fully secured debt. C) It is protected by government. D) None of these. Show Answer Correct Answer: A) It is an unsecured debt. 11. Which of the following is a characteristic of equity shares? A) No voting rights. B) Guaranteed returns. C) Ownership in the company. D) Fixed dividend payment. Show Answer Correct Answer: C) Ownership in the company. 12. Owner's fund does not refer to the funds invested by the company owners for its development. A) True. B) False. C) All the above. D) None of the above. Show Answer Correct Answer: B) False. 13. The term for medium term source of finance ranges from A) 0-5 years. B) 1-5 years. C) 6-10 years. D) None of these. Show Answer Correct Answer: B) 1-5 years. 14. What is start up capital? A) Finance needed before starting trading. B) Finance paid after trading. C) Finance paid to banks. D) None of the above. Show Answer Correct Answer: A) Finance needed before starting trading. 15. The maturity period of commercial paper usually ranges from A) 90-364 days. B) 20-135 days. C) 45-175 days. D) 50-100days. Show Answer Correct Answer: A) 90-364 days. 16. A recruitment agency floats itself on the stock market. This means that A) It borrows money from the stock market. B) It recruits workers from the stock exchange. C) Its sales increase. D) Its share are available to buy on the stock market. Show Answer Correct Answer: D) Its share are available to buy on the stock market. 17. Which of the following is an advantage of issuing preference shares over equity shares? A) Preference shareholders have voting rights. B) Preference shareholders receive dividends after equity shareholders. C) Dividends on preference shares are fixed. D) Preference shares increase the debt ratio of the company. Show Answer Correct Answer: C) Dividends on preference shares are fixed. 18. What is the difference between loans and shares? A) Loans mean borrowing money from banks and other financial lenders. B) Loans are high risk as more loans mean more debt interest must be paid even if the business doesn't make any profit. C) Shareholders will want a share of the profits at some point (dividend). D) Selling shares mean selling some of the ownership of a business. Show Answer Correct Answer: A) Loans mean borrowing money from banks and other financial lenders. 19. Which one of the following is a definition of the term 'break-even level of output' A) The level of output at which total profit = total costs. B) The level of output at which total fixed costs = total revenue. C) The level of output at which total variable costs = total fixed costs. D) The level of output at which total revenue = total costs. Show Answer Correct Answer: D) The level of output at which total revenue = total costs. 20. The offering of new shares by the company in the primary market to the existing shareholders is known as A) Right issue. B) Private placement. C) Preferential share. D) None. Show Answer Correct Answer: A) Right issue. 21. DEMAND DEPOSITS: A) B.Money in checking accounts that the firm can pay out immediately. B) C.Money in saving accounts. C) D.Unpaid bills from sales to other companies. D) None of the above. Show Answer Correct Answer: A) B.Money in checking accounts that the firm can pay out immediately. 22. What is a characteristic of hire purchase? A) No initial deposit required. B) Monthly installments include interest. C) Immediate full ownership. D) No maintenance costs. Show Answer Correct Answer: B) Monthly installments include interest. 23. ....is the most important source of raising long term capital by the company. A) Equity shares. B) Commercial banks. C) Financial institutions. D) Commercial paper. Show Answer Correct Answer: A) Equity shares. 24. What is a major limitation of retained earnings? A) It is a guaranteed source of income. B) It may cause dissatisfaction among shareholders. C) It is easy to access. D) It is a permanent source of funds. Show Answer Correct Answer: B) It may cause dissatisfaction among shareholders. 25. Nvestors who want steady income may not prefer ..... A) Debentures. B) Equity Shares. C) Bonds. D) Both A and C. Show Answer Correct Answer: B) Equity Shares. ← PreviousNext →Related QuizzesClass 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 1Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 2Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 3Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 4Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 5Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 6Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 8Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 9Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 10Class 11 Business Studies Chapter 7 Sources Of Business Finance Quiz 11 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books