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Created on April 22, 2026 By

CA Sonal Saboo

CMA Inter

Inter FMDA PN-11 Quiz 9

This quiz is based on the CMA Financial Management and Business Data Analytics paper.
Each question is multiple-choice with 4 options, and only 1 option is correct.
Attempt the quiz to test your understanding of CMA FMDA concepts.

1 / 25

Category: Financial Management and Business Data Analytics PN-11

1. Operating Profit is also known as:

a. Net Profit

b. Gross Profit

c. EBIT

d. EBT

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Category: Financial Management and Business Data Analytics PN-11

2. If EBIT is ₹2,50,000 and Net Sales are ₹12,00,000, what is the Operating Profit Ratio?

a. 18.50%

b. 20.83%

c. 21.50%

d. 25%

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Category: Financial Management and Business Data Analytics PN-11

3. According to Walter's Model, when should a company retain its earnings?

a. - When return (r) < cost of capital (k)

b. - When return (r) = cost of capital (k)

c. - When return (r) > cost of capital (k)

d. . When the company has surplus cash

4 / 25

Category: Financial Management and Business Data Analytics PN-11

4. A firm has: DOL = 4.0 DFL = 3.5 What is the Degree of Combined Leverage (DCL)?

a. 2.5

b. 3.5

c. 6

d. 14

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Category: Financial Management and Business Data Analytics PN-11

5. A company has the following data: Sales: 2,00,000 Variable Costs: ₹160,000 Fixed Costs: ₹20,000 What is the Degree of Operating Leverage (DOL)?

a. 1.5

b. 2

c. 2.5

d. 3

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Category: Financial Management and Business Data Analytics PN-11

6. What does a positive Net Present Value (NPV) indicate about a project?

a. The project generates returns lower than the firm's required rate

b. The project will result in a loss

c. The project earns a return higher than the required rate

d. The firm should reject the project

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Category: Financial Management and Business Data Analytics PN-11

7. Ramya Ltd.’s share beta factor is 1.40. The risk free rate of interest of government securities is 9%. The expected rate of return on the company equity shares is 16%. The cost of equity capital based on CAPM is:

a. 9%

b. 16%

c. 18.80%

d. 15.80%

8 / 25

Category: Financial Management and Business Data Analytics PN-11

8. Company X issues 11% bonds of 100 for an amount aggregating 200,000 at 10% premium, redeemable at par after 5 years. Corporate tax rate is 35%. The cost of bonds would be:

a. 4.90%

b. 5.00%

c. 5.20%

d. 6.00%

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Category: Financial Management and Business Data Analytics PN-11

9. What is the formula for calculating the cost of retained earnings (kr)?

a. kr = ke × (1 + t) × (1 + b)

b. kr = ke × (1 – t) × (1 – b)

c. kr = ke ÷ (1 – t)

d. kr = ke × t × b

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Category: Financial Management and Business Data Analytics PN-11

10. If the risk-free rate is 14%, the market return is 18%, and β = 1, what is the cost of equity?

a. 14%

b. 16%

c. 18%

d. 20%

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Category: Financial Management and Business Data Analytics PN-11

11. What formula is used to calculate the cost of equity capital under the CAPM model?

a. Ke = Rf × β(Rm - Rf)

b. Ke = Rm + Rf + β

c. Ke = Rf + β(Rm - Rf)

d. Ke = Rm × β + Rf

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Category: Financial Management and Business Data Analytics PN-11

12. Who facilitates the conversion of GDRs into underlying shares?

a. Stock exchanges

b. Government agencies

c. Depository or custodian banks

d. Mutual funds

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Category: Financial Management and Business Data Analytics PN-11

13. In which currency is a GDR typically denominated?

a. Local currency

b. British Pound

c. Indian Rupee

d. US Dollar

14 / 25

Category: Financial Management and Business Data Analytics PN-11

14. What does the repo rate represent?

a. The inflation rate in the economy

b. The annual interest rate earned on a repo transaction

c. The profit earned from securities

d. The tax rate on capital gains

15 / 25

Category: Financial Management and Business Data Analytics PN-11

15. Insider trading becomes illegal when:

a. Done by a foreign investor

b. It leads to a rise in share price

c. It is based on confidential information not available to the public

d. It is done through a SEBI-registered broker

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Category: Financial Management and Business Data Analytics PN-11

16. Who introduced Masala Bonds in India?

a. Reserve Bank of India

b. World Bank

c. International Finance Corporation (IFC)

d. Ministry of Finance

17 / 25

Category: Financial Management and Business Data Analytics PN-11

17. What is another name for the Secondary Market?

a. New issue market

b. Bond market

c. Derivatives market

d. Stock market

18 / 25

Category: Financial Management and Business Data Analytics PN-11

18. What is another name for the Primary Market?

a. Old issue market

b. New issue market

c. Secondary market

d. Derivatives market

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Category: Financial Management and Business Data Analytics PN-11

19. What is the main function of SEBI as per its preamble?

a. To protect investors and regulate the securities market

b. To promote foreign direct investment

c. To regulate banks and insurance companies

d. To provide loans to startups

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Category: Financial Management and Business Data Analytics PN-11

20. Which of the following is a feature of hedge funds?

a. Investment only in government securities

b. Strict adherence to equity- only investment

c. Flexibility in investment options

d. Tax-free returns

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Category: Financial Management and Business Data Analytics PN-11

21. What is the formula for Operating Profit Ratio?

a. EBIT ÷ Total Assets × 100

b. Net Profit ÷ Net Sales × 100

c. Gross Profit ÷ Net Sales × 100

d. EBIT ÷ Net Sales × 100

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Category: Financial Management and Business Data Analytics PN-11

22. If the Cost of Goods Sold (COGS) is ₹8,00,000 and the Average Inventory is ₹2,00,000, what is the Inventory Turnover Ratio?

a. 4 times

b. 6 times

c. 7 times

d. 5 times

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Category: Financial Management and Business Data Analytics PN-11

23. A company has the following data: Net Credit Purchases ₹12,00,000, Opening Accounts Payable ₹4,00,000, Closing Accounts Payable ₹8,00,000. What is the Creditors Turnover Ratio?

a. 1.5 times

b. 2 times

c. 2.5 times

d. 3 times

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Category: Financial Management and Business Data Analytics PN-11

24. A company reports Net Annual Sales of ₹20,00,000 and has Working Capital of ₹5,00,000. What is the Working Capital Turnover Ratio?

a. 2.5 times

b. 4 times

c. 3 times

d. 10 times

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Category: Financial Management and Business Data Analytics PN-11

25. XYZ Ltd. has a Current Ratio of 3: 1 and Net Current Assets of 10,00,000. What are the Current Assets?

a. ₹ 10,00,000

b. ₹ 12,00,000

c. ₹ 15,00,000

d. ₹ 20,00,000

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Inter PN-11 FMDA Quiz 9

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