Financial Management question and answer for Bank Interview

Q.What is financial management ?

Ans:Financial management means planning organizing ,directing and controlling the  financial activities such as procurement  and utilization of funds of the enterprise


Q.What is financial function ?
 Ans:

• Estimation of capital requirements.
• Determination of capital composition
• Investment of funds

Q.Profit maximization 

Ans: Profit maximization in financial management .represent the process or the approach by which profit (EPS) of the business are increased.

Q.Wealth maximization 

Ans: Wealth maximization  refers to the maximization of shareholder wealth.

Q.Perfect capital market 

Ans:Perfect capital market is a market in which there are never any arbitrage opportunities .

Q.Assumption of perfect capital market 

Ans :The assumption of perfect capital market are enumerated below.

• No transaction (Brokerage) costs.
• No taxes
• No cost to obtain information 
• No cost with financial distress 
• Large number of buyers and sellers 
• Both individuals and firms have equal access to market 
• Every one has the same expectations.

      

Q.Efficient market 

Ans:Efficient market is one where the market price is an unbiased estimate of the true value of the investment.

Q.Market efficiency

Ans:Market efficiency measure of the availability of the information that provides maximum opportunities to buyers and sellers to effect transaction with minimum transaction costs.

Q.What is Risk.?

Ans:The Probability that an actual return on an investment will be lower than the expected return.

Q.What is Return ? 

Ans:The return consists of the income and the capital gains relative on an investment .


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