FM B Financial management environment

Written by Mahnoor Sheikh (ACCA)

ACCA · Financial Management · 6 questions

Name: ____________________ Date: ____________

Which of these is an example of monetary policy?
- A A new subsidy
- B A rise in income tax
- C A cut in public spending
- D A central bank raising interest rates
Which market deals mainly with long-term finance?
- A The money market
- B The foreign exchange market
- C The capital market
- D The commodity market
Which of these is a money market instrument?
- A A treasury bill
- B A long-term bond
- C An ordinary share
- D A debenture over land
In which market are new shares first issued?
- A The money market
- B The secondary market
- C The futures market
- D The primary market
What is the role of a financial intermediary?
- A To audit companies
- B To set interest rates by law
- C To channel funds from savers to borrowers
- D To collect taxes
A rise in interest rates generally has what effect on a company's investment appraisal?
- A It has no effect
- B It raises the cost of finance and lowers the value of future cash flows
- C It raises all cash flows
- D It removes risk

Answer key

1. D, 2. C, 3. A, 4. D, 5. C, 6. B