PREFINAL EXAMS BUSINESS FINANCE

Question 1
This is a type of investment which consists of money placed into a banking institution.
Select one:
a.
Bank deposit
b.
Real estate
c.
Bonds
d.
Insurance
The correct answer is: Bank deposit
Question 2
Which of the following is not needed in solving for annuity
Select one:
a.
Periodic payment at the end of every period
b.
Number of times the interest is compounded per year
c.
Interest rate
d.
Principal
The correct answer is: Principal
Question 3
"Statement I. Short-term goals have a time frame from one to five years.
Statement II. intermediate goals involve financial plans that are more than five years off,
such as retirement, money for children's college education, or the purchase of a vacation
home"
Select one:
a.
Statement I is False; Statement II is True
b.
Statement I is true; Statement II is false
c.
Both Statements are True
d.
Both Statements are False
The correct answer is: Both Statements are False
Question 4
"Statement I. Ordinary annuity means that periodic payments are made at the end of
each payment interval while nnuity due means that periodic payments are made at the
beginning of each payment interval.

Statement II. Fixed capital are funds used for its day-to-day operations"
Select one:
a.
Both Statements are True
b.
Both Statements are False
c.
Statement I is False; Statement II is True
d.
Statement I is true; Statement II is false
The correct answer is: Statement I is true; Statement II is false
Question 5
Correct
This is a collection of investments from one or more categories.
Select one:
a.
Bank deposit
b.
Real estate
c.
Bonds
d.
Mutual fund
The correct answer is: Mutual fund
Question 6
Which is not a principle of personal finance?
Select one:
a.
Start saving an old age
b.
Budget your money
c.
Know your take home pay
d.
Pay yourself first
The correct answer is: Start saving an old age
Question 7
The fruit trees attached on a farm is considered as
Select one:
a.
Product
b.
Insurance
c.
Real estate
d.
Stocks
Feedback
The correct answer is: Real estate
Question 8
What will a deposit of Php 4,500 at 12% compounded monthly (12 times a year) be worth
at the end of 10 years?
Select one:
a.
None of these
b.
Php 14,851.80
c.
Php 14,304.80
d.
Php 13,997.40
Feedback
The correct answer is: Php 14,851.80
Question 9
You need to have Php 51,000 after 3 years. Assuming that you will only deposit once with
a 5% annual interest, how much will you deposit today?
Select one:
a.
Php 44,348
b.
Php 16,190
c.
Php 48,571
d.
Php 44,056
The correct answer is: Php 44,348
Question 10
Which is not a principle of personal finance?
Select one:
a.
Be an irresponsible borrower who repays as promised, showing you are worthy of getting
credit in the future.
b.
An annual budget to identify expected income and expenses, including savings, will help
you live within your income.
c.
Obtain rate information from multiple financial services firms to get the best value for
your money
d.
Purchase insurance to avoid being wiped out by a financial loss, such as an illness or
accident.
The correct answer is: Be an irresponsible borrower who repays as promised, showing you
are worthy of getting credit in the future.
Question 11
Which is not a basic principle of personal finance
Select one:
a.
Map your financial future
b.
Don't borrow what you can't repay
c.
Low returns means high risks
d.
Budget your money
The correct answer is: Low returns means high risks
Question 12
Scammers mislead investors by suggesting that big financially sound institutions
participate in their programs, when in fact such connections do not exist.
Select one:
a.
Offshore Investing Scheme
b.
Ponzi scheme
c.
Prime bank
d.
Pump and dump
The correct answer is: Prime bank
Question 13
"Statement I. The risk-return tradeoff is the principle that potential return rises with an
increase in risk.
Statement II. Time value of money deals with future value and present value."
Select one:
a.
Both Statements are False
b.
Statement I is true; Statement II is false
c.
Statement I is False; Statement II is True
d.
Both Statements are True
The correct answer is: Both Statements are True
Question 14
Garry plans to buy a calculator to aid him in his math class. The statement best describes
Select one:
a.
Consumable-product goals
b.
Durable-product goals
c.
Intermediate goal
d.
Long-term goal
The correct answer is: Durable-product goals
Question 15
Ben is a senior high school student. Which of his goals is realistic?
Select one:
a.
To travel throughout space and live in Mars
b.
To top the final exam
c.
To buy all the candies in the world
d.
To be the president of Africa after a year
The correct answer is: To top the final exam
Question 16
Correct
You need to have Php 100,000 after 4 years. Assuming that you will only deposit once with
a 10% annual interest, how much will you deposit today?
Select one:
a.
Php 71,428.57
b.
Php 90,909
c.
Php 68,301
d.
Php 22.727
The correct answer is: Php 71,428.57
Question 17
This is the management of money and financial decisions for a person or family including
budgeting, investments, retirement planning and investments
Select one:
a.
None of these
b.
Business finance
c.
Personal Finance
d.
Corporate Finance
The correct answer is: Personal Finance
Question 18
John has a highly dangerous job. He pays premiums every month by depositing the money
to the bank account of the engaged company. He does this so that he will have
remuneration in case he will be suffering from an accident. John is investing on
Select one:
a.
Mutual funds
b.
Bank deposits
c.
Insurance
d.
Bonds
The correct answer is: Insurance
Question 19
Marrie pays monthly premiums to a company with the agreement that Marrie will be
imdemnified in case her house gets damaged because of a natural disaster or it gets
burned due to an unwanted accident. This is a type of
Select one:
a.
Bank deposit
b.
Insurance
c.
Real estate
d.
Bonds
The correct answer is: Insurance
Question 20
Jenny decided to buy a lot to be used in the future for her planned business. She invested
in
Select one:
a.
Real estate
b.
Bank deposit
c.
Insurance
d.
Bonds
Feedback
The correct answer is: Real estate
Question 21
"Statement I. A return is the variability of returns from those that are expected.
Statement II. The time value of money is the idea that money available at the present time
has the same worth in the future due to its potential earning capacity"
Select one:
a.
Statement I is true; Statement II is false
b.
Statement I is False; Statement II is True
c.
Both Statements are True
d.
Both Statements are False
Feedback
The correct answer is: Both Statements are False
Question 22
Jen is a senior high school student. Which of her goals is realistic?
Select one:
a.
To save money for 200 years
b.
To travel around the world without riding any vehicle
c.
To buy all the dress in the Philippines
d.
To graduate with the distinction - cum laude
The correct answer is: To graduate with the distinction - cum laude
Question 23
What annual interest rate would you need in order to have an ordinary annuity of
Php7,500 per year accumulate to Php 279,600 in 15 years?
Select one:
a.
12%
b.
14%
c.
None of these
d.
16%
The correct answer is: 12%
Question 24
This is a type of security that signifies ownership in a corporation and represents a claim
on part of the corporation's assets and earnings.
Select one:
a.
Mutual funds
b.
Real estate
c.
Stock
d.
Insurance
The correct answer is: Stock
Question 25
How much will an ordinary annuity of Php 650 per year be worth in eight years at an
annual interest rate of 8 percent?
Select one:
a.
Php 6,366.10
b.
Php 6,433.38
c.
Php 6,913.79
d.
Php 4,800.27
The correct answer is: Php 6,913.79
Question 26
Which is not included in SMART goal-setting guidelines
Select one:
a.
Specific
b.
Reaction-Oriented
c.
Measurable
d.
Timely
The correct answer is: Reaction-Oriented
Question 27
A senior high school student deposits a part of his salary to his bank account so that he
will have funds for future use. Which statement best depicts the situation?
Select one:
a.
Pay yourself first
b.
Know your take home pay
c.
Start saving at young age
d.
Budget your money
The correct answer is: Start saving at young age
Question 28
"Statement I. An investment is an asset or item that is acquired with the expectation that
it will generate interest, income or appreciate its value in the future.
Statement II. A bond is a type of security that signifies ownership in a corporation and
represents a claim on part of the corporation's assets and earnings. "
Select one:
a.
Both Statements are True
b.
Statement I is true; Statement II is false
c.
Statement I is False; Statement II is True
d.
Both Statements are False
Feedback
The correct answer is: Both Statements are True
Question 29
Which goal is action oriented?
Select one:
a.
To buy a television set by saving a part of my salary.
b.
To buy a car within 10 months
c.
To buy a Php 1,000,000 worth car
d.
To buy a television set
The correct answer is: To buy a television set by saving a part of my salary.
Question 30
This is a type of security that signifies ownership in a corporation and represents a claim
on part of the corporation's assets and earnings.
Select one:
a.
Insurance
b.
Bank deposit
c.
Bonds
d.
Real estate
Feedback
The correct answer is: Bonds
Question 31
Jennie, the owner of Hawaii Resort used her money to put up an additional cottage. Jennie
invested in
Select one:
a.
Insurance
b.
Stocks
c.
Product
d.
Real estate
The correct answer is: Real estate
Question 32
Kelly has Php 100,000 in her savings account. Kelly invests in
Select one:
a.
Bonds
b.
Mutual funds
c.
Insurance
d.
Bank deposits
Feedback
The correct answer is: Bank deposits
Question 33
"Statement I. A SMART financial goal need not be action-oriented
Statement II. A SMART financial goal must be timely"
Select one:
a.
Both Statements are True
b.
Statement I is true; Statement II is false
c.
Statement I is False; Statement II is True
d.
Both Statements are False
Feedback
The correct answer is: Statement I is False; Statement II is True
Question 34
Which is not a basic principle of personal finance
Select one:
a.
Don't borrow what you can't repay
b.
Expend everything you have because you have lots of money
c.
Know your take home pay
d.
Start saving at young age
The correct answer is: Expend everything you have because you have lots of money
Question 35
Jen made a bank deposit worth Php 15,000. With 9% annual interest, how much is the
future value of his deposit after 5 years?
Select one:
a.
Php 28,500
b.
Php 15,675
c.
Php 13,500
d.
Php 21,750
Feedback
The correct answer is: Php 21,750
Question 36
How much will an ordinary annuity of Php 650 per year be worth in eight years at an
annual interest rate of 6 percent?
Select one:
a.
Php 6,433.38
b.
Php 6,897.76
c.
Php 7,021.80
d.
Php 8,975.38
The correct answer is: Php 6,433.38
Question 37
Which is a SMART goal?
Select one:
a.
Marry wants to buy 10 pcs of bond papers for her art class.
b.
Chen plans to buy a new bag worth Php2,000. He plans to buy it after two month by
saving a part of his daily allowance.
c.
To graduate with the distinction - cum laude
d.
Franz aims to go to Disneyland.
The correct answer is: Chen plans to buy a new bag worth Php2,000. He plans to buy it
after two month by saving a part of his daily allowance.
Question 38
What will a deposit of Php 4,500 at 10% compounded semiannually be worth if left in the
bank for six years?
Select one:
a.
None of these
b.
Php 8,081.55
c.
Php 8,181.55
d.
Php 7,959.55
Feedback
The correct answer is: Php 8,081.55
Question 39
Jen made a bank deposit worth Php 15,000. With 20% annual interest, how much is the
future value of his deposit after 5 years?
Select one:
a.
Php 16,500
b.
Php 25,000
c.
Php 30,000
d.
Php 15,500
Feedback
The correct answer is: Php 30,000
Question 40
These product goals usually involve infrequently purchased, expensive items such as
appliances, cars, and sporting equipment; these consist of tangible items.
Select one:
a.
Consumable-product goals
b.
Durable-product goals
c.
Specific Product Goald
d.
None of these
The correct answer is: Durable-product goals
Question 41
What will a deposit of Php 4,500 at 7% compounded annual interest be worth if left in the
bank for nine years?
Select one:
a.
Php 8,385.78
b.
Php 8,279.23
c.
Php 8,273.25
d.
None of these
The correct answer is: Php 8,273.25
Question 42
"Statement I. Long-term goals should be planned in coordination with short-term and
intermediate ones

Statement II. Setting and achieving short-term goals is the basis for achieving long-term
goals. "
Select one:
a.
Statement I is true; Statement II is false
b.
Both Statements are False
c.
Statement I is False; Statement II is True
d.
Both Statements are True
The correct answer is: Both Statements are True
Question 43
What is the present value of annuity due of Php 2,500 payable at the beginning of every
year for 4 years, if interest rate is 10%?
Select one:
a.
Php 8,717.13
b.
Php 14,304.80
c.
None of these
d.
Php 9,909.25
Feedback
The correct answer is: Php 8,717.13
Question 44
John made a bank deposit worth Php 10,000. With 0.1% annual interest, how much is the
future value of his deposit after 4 years?
Select one:
a.
Php 10,400
b.
Php 10,040
c.
Php 14,000
d.
Php 11,000
The correct answer is: Php 10,040
Question 45
This is a form of fraudulent investment operation where the individual or organization
operator pays returns to its investors from new capital paid to the operators by new
investors recruited.
Select one:
a.
Offshore Investing Scheme
b.
Ponzi scheme
c.
Prime bank
d.
Pump and dump
The correct answer is: Ponzi scheme
Question 46
If you require a 9 percent annual return on your investments, you would prefer Php15,000
five years from today rather than an ordinary annuity of Php 1,000 per year for 15 years.
Select one:
a.
False
b.
True
c.
May be true and may be false
d.
Cannot be determined
The correct answer is: True
Question 47
Which is not a principle of personal finance?
Select one:
a.
Stay insured
b.
Borrow what you can't repay
c.
Map your financial future
d.
Budget your money
The correct answer is: Borrow what you can't repay
Question 48
Armi deposits Php 4,500 at the beginning of each month (12 times a year) in a fund that
serves at 24% compounded monthly. How much is the fund at the end of 3 years?
Select one:
a.
Php 384,654.15
b.
Php 48,571
c.
Php 283,654.15
d.
None of these
The correct answer is: Php 283,654.15
Question 49
Marry wants to buy 10 pcs of bond papers for her art class. The statement best describes
Select one:
a.
Intermediate goal
b.
Long-term goal
c.
Durable-product goals
d.
Consumable-product goals
The correct answer is: Consumable-product goals
Question 50
"Statement I. According to our lesson, before committing to significant expenditures,
estimate how much income is likely to be available for you.

Statement II. Two factors commonly influence your financial aspirations for the future.
The first is the time frame in which you would like to achieve your goals. The second is the
type of financial need that drives your goals. "
Select one:
a.
Both Statements are False
b.
Both Statements are True
c.
Statement I is true; Statement II is false
d.
Statement I is False; Statement II is True
The correct answer is: Both Statements are True
Finish review