Which of the following is not a decision in financial management?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Pricing Decisions
Option (1) Financing Decisions — A financial decision (Incorrect). This decides how much money is raised from each source, such as debt and equity.
Option (2) Pricing Decisions — Not a financial decision (Correct). Fixing the price of a product is a marketing decision. Price is one of the four Ps of the marketing mix. Financial management deals with three broad decisions: investment, financing and dividend. Pricing is not one of them.
Option (3) Investing Decisions — A financial decision (Incorrect). This decides in which assets the firm’s funds will be invested.
Option (4) Dividend Decisions — A financial decision (Incorrect). This decides how much of the profit is paid to shareholders and how much is kept in the business.
NCERT (2026-27 Edition): “Financial Decisions Financial management is concerned with the solution of three major issues relating to the financial operations of a firm corresponding to the three questions of investment, financing and dividend decision. In a financial context, it means the selection of best financing alternative or best investment alternative. The finance function, therefore, is concerned with three broad decisions which are explained below:” |