BUSFIN Quiz #1 Reviewer

Which best defines the function of finance?

• The science of consumer spending

• The regulation of income taxes

• The allocation and management of financial resources

• The distribution of company profits

Personal finance decisions generally involve:

• Government revenue planning

• Corporate asset valuation

• Individual saving, spending, and investing

• Stockholder equity balancing

Public finance differs from corporate finance in that it focuses more on:

• Marketing national brands

• Dividend declaration

• Personal financial planning

• Tax revenue and public spending

Which is true of financial management as a division of business finance?

• It only involves government budgets

• It includes investment policy decisions

• It is unrelated to budgeting

• It is the same as marketing

The Department of Finance in the Philippines is primarily involved in:

• Issuing commercial bonds

• Monitoring bank accounts

• Formulating and implementing fiscal policies

• Managing consumer loans

A mutual fund acts as a financial intermediary by:

• Lending directly to government

• Accepting deposits from retail banks

• Pooling investor funds to invest in securities

• Issuing preferred shares

Pension funds are designed to:

• Provide capital for start-ups

• Pay out retirement benefits using accumulated contributions

• Issue long-term debt

• Lend money to governments

In which market are newly issued financial instruments sold?

• Derivative market

• Primary market

• Grey market

• Auction market

Which statement about the capital market is FALSE?

• It includes long-term instruments

• It trades commercial paper

• It involves stocks and bonds

• It can be part of the Philippine Stock Exchange

What differentiates the money market from the capital market?

• Its instruments are less regulated

• It operates only in rural areas

• It trades short-term, highly liquid securities

• It deals mainly with foreign exchange