WorksheetsDistrict 19 MC part 1
Total questions: 15
Worksheet time: 8mins
To protect against grain loss due to wind damage to a grain storage facility, a farmer would need:
Liability insurance
Crop insurance
Property insurance
Accident insurance
None of these
If Jack's farm has a working capital value greater than $0, what do we know for certain about its current ratio:
It is less than $0
It is less than one
It is greater than one
It is equal to one
We cannot determine from the information given
What is a legally binding agreement on a future exchange to buy or sell a commodity?
Option
Futures contract
Basis
Hedging
Which of the following is unnecessary information to calculate the time value of money?
Length of time
Interest rate
Initial investment value
Stock market loss/gain
Final investment value
The financial ratio that would be best to evaluate a farm's ability to cover unexpected operational expenses is:
Asset turnover ratio
liquidity ratio
debt-to-asset ratio
rate of return on assets
current ratio
The degree to which a farm's assets adequately secure its debts is referred to as:
Liquidity
Solvency
Efficiency
Profitability
Debt Structure
What is loan amortization?
the ability to get a loan from the bank
paying off debt with a varying repayment schedule
paying off debt with a fixed repayment schedule
the ability to repay a loan from the bank
If pork and chicken are substitutes and the price of chicken rises, what happens to the demand of pork?
Demand for pork increases
Demand for pork decreases
Price of substitutes don't affect demand shifts
None of these
What is the difference between local cash price and price of the expiring futures contract?
Option
futures contract
basis
hedging
margin call
Price that must be paid for options
Strike price
long hedge
premium
short hedge
grid
If John wants to know how much money he will have to live on when he retires, what process will he use to figure out his current investments' value at retirement?
budgeting
discounting
amortizing
compounding
none of these
What is interest?
The amount of money borrowed from the lender at the time of the loan origination.
half the principle
the cost of borrowing money
the balance of the loan
What is the length of time for the term on a machinery loan?
5-year property
7-year property
10-year property
Can be negotiated with the lender
Which economic principle states that at some point in time marginal product decreases with each additional unit of input?
Diminishing economic returns
Diminishing Physical returns
Diminishing total returns
opportunity costs
Your cow gets out onto a public road and is hot, causing an injury to an automobile and its passenger. For protection, you need __________ insurance.
accident and health
liability
property
livestock
none of these
