BEHAVIORAL FINANCE MCQS

  1. Utility refers to the total _ received from consuming a goods or service.

a. Revenue

b. Satisfaction

c. Profit

d. Sale

2. Traditional approach confines finance function only to _ funds

a. Raising

b. Mobilizing

c. Utilizing

d. Financing

3. Why do you plan for retirement instead of relying on Social Security to take care of you?

a. Monthly Social Security benefits are not going to be enough to live on comfortably

b. You are depending on another to take care of you

c. The system may not be able to pay promised benefits in the future

d. All of the answers are correct

4. The most popular type of Investment Company is a __.

a. unit investment trust

b. mutual fund

c. closed-end investment company

d. real estate investment trust

5. What concept is best explained by the statement, “Money spent here cannot be spent there”?

a. Significant purchases

b. Law of diminishing return

c. Opportunity cost

d. Delayed gratification

6. Financial Management is mainly concerned with __.

a. All aspects of acquiring and utilizing financial resources for firms activities

b. Arrangement of funds

c. Efficient Management of every business

d. Profit maximization

7. Economics is the study of:

a. production technology

b. consumption decisions

c. the best way to run society

d. how society decides what, how and for whom to produce

8. Market value of the shares are decided by __.

a. the respective companies

b. the investment market

c. the government

d. shareholders

9. The primary reason for insurance is to:

a. Transfer risk

b. Increase your assets

c. Save for college

d. All of the answers are correct

10. The decision to invest a substantial sum in any business venture expecting to earn a minimum return is called __.

a. working capital decision

b. an investment decision

c. a production decision

d. a sales decision

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