Chapter Exam

Chapter 7: Financial Mathematics — Online MCQ Test

Q: An annuity where the payments are made at the end of each period is called ____.

Answer: B. Ordinary Annuity — An ordinary annuity (or annuity immediate) involves payments at the end of each period, whereas annuity due involves payments at the beginning.

Q: Which of the following terms refers to the amount of money set aside periodically to accumulate to a specific future sum?

Answer: A. Sinking Fund — A sinking fund is a fund established by an economic entity by setting aside revenue over time to fund a future capital expense or repayment of a long-term debt.

Q: If the market value of a share is less than its face value, the share is said to be sold at ____.

Answer: C. Discount — When market price is lower than face value, the stock is trading at a discount.

Q: If an investor buys a share of Rs. 100 at a premium of Rs. 20, the cost of purchase excluding brokerage is ____.

Answer: C. Rs. 120 — When shares are bought at a premium, the market price is Face Value + Premium = 100 + 20 = 120.

Q: Which scenario results in the highest effective cost to a buyer when purchasing shares?

Answer: C. Buying at premium with brokerage — Premium increases the purchase price, and brokerage adds further to the total cost paid by the investor.

BUSINESS MATHS AND STATISTICS · CLASS 11th · Tamil Nadu State Board

Practice Chapter 7: Financial Mathematics with a free chapter-wise online MCQ test for Tamil Nadu State Board CLASS 11th BUSINESS MATHS AND STATISTICS. This chapter covers: Focusing on financial calculations this chapter details annuity types present value future value and sinking funds. Students analyze stocks shares debentures dividend yields and br.... AI-generated questions from basic to board-exam level, with instant results and explanations.

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Chapter 7: Financial Mathematics — Important Questions & Answers (FAQ)

Frequently asked questions from Tamil Nadu State Board CLASS 11th BUSINESS MATHS AND STATISTICS — Chapter 7: Financial Mathematics, with answers and explanations. These are sample questions; the exam has its own separate question set.

An annuity where the payments are made at the end of each period is called ____.

A. Annuity Due
B. Ordinary Annuity ✓
C. Deferred Annuity
D. Perpetuity

Answer: B. Ordinary Annuity
An ordinary annuity (or annuity immediate) involves payments at the end of each period, whereas annuity due involves payments at the beginning.

Which of the following terms refers to the amount of money set aside periodically to accumulate to a specific future sum?

A. Sinking Fund ✓
B. Present Value
C. Market Value
D. Dividend

Answer: A. Sinking Fund
A sinking fund is a fund established by an economic entity by setting aside revenue over time to fund a future capital expense or repayment of a long-term debt.

If the market value of a share is less than its face value, the share is said to be sold at ____.

A. Premium
B. Par
C. Discount ✓
D. Brokerage

Answer: C. Discount
When market price is lower than face value, the stock is trading at a discount.

If an investor buys a share of Rs. 100 at a premium of Rs. 20, the cost of purchase excluding brokerage is ____.

A. Rs. 80
B. Rs. 100
C. Rs. 120 ✓
D. Rs. 20

Answer: C. Rs. 120
When shares are bought at a premium, the market price is Face Value + Premium = 100 + 20 = 120.

Which scenario results in the highest effective cost to a buyer when purchasing shares?

A. Buying at par
B. Buying at discount
C. Buying at premium with brokerage ✓
D. Buying at par with no brokerage

Answer: C. Buying at premium with brokerage
Premium increases the purchase price, and brokerage adds further to the total cost paid by the investor.

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