__________ aims at reducing the cost of funds procured, keeping the risk under control and achieving effective deployment of such funds
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Financial Management
Option (1) Financial Management — Correct. Financial management is about getting funds at the lowest cost and using them well. It keeps the risk under control, makes sure enough funds are there when needed and avoids idle money.
Option (2) Statistical Decision — Incorrect. The three financial decisions are the investment, financing and dividend decisions; a statistical decision is not one of them.
Option (3) Dividend Decision — Incorrect. This decision covers only how much of the profit is paid to shareholders and how much is kept in the business.
Option (4) Investment Decision — Incorrect. This decision covers only where the funds are put, in fixed assets and current assets. It does not deal with the cost of raising the funds.
NCERT (2026-27 Edition): “Financial Management … Financial Management aims at reducing the cost of funds procured, keeping the risk under control and achieving effective deployment of such funds. It also aims at ensuring availability of enough funds whenever required as well as avoiding idle finance. …” |