WorksheetsFINANCE FIASCO round 1
Total questions: 25
Worksheet time: 8mins
Suppose you have $100 in a savings account earning 2 % interest a year. After five years, how much would you have?
more than $102
exactly $102
less than $102
don’t know
Imagine that the interest rate on your savings account is 1% a year and inflation is 2% a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?
more
less
same
don't know
If interest rates rise, what will typically happen to bond
prices? Rise, fall, stay the same, or is there no relationship?
Rise
fall
Stay the same
no relationship
Government grants are generally offered to businesses in:
prosperous areas
economically deprived areas
Areas with high employment
Cold areas
A business uses Hire purchase because:
This allows a business to acquire assets to keep by paying for it over a period
This allows them to use an asset when they want
They can use it without paying for it
This allows businesses to use assets and by paying for it for a period
Find the compound interest due on a loan of $20,000 for 5 years if the rate of interest is at 10% per annum
6406.32
6406.22
6406.59
6406.88
A holding period:
Is always a year
Is always a month
Is always a quarter
can be any length of time
What does the standard deviation measure?
The gain on the investment
The holding period
Risk
Amount of dividend
Think carefully about this one. Some investors will accept high-risk investments and some investors prefer low-risk investments. What term best describes that situation?
Risk Aversion
Risk return tradeoff
Risk tolerance
Rate of return
The structure that is available in an economy to mobilize the capital from various surplus sectors of the economy and allocate and distribute the same to the various needy sectors is known as ------
Economic environment
Financial system
Financial environment
Financial market
The degree of total leverage can be applied in measuring the change in
EBIT to the percentage change in quantity
Quantity to a percentage change in EBIT
EPS to a percentage change in quantity
EPS to a percentage change in EBIT
In --------------- Securities share bond debentures are offered to the public for subscription for the purpose of raising capital or fund.
Prime securities
Public securities
Preferred securities
Primary securities
. Income statement format that separates the cost of goods sold into categories?
standard b
Detailed
Expanded
Multi-step
Earnings per share show investors the __________ earned per outstanding share of stock.
Operating Income
income before interest and taxes
Net Income
Income after interest and taxes
Which trial balance lists all the business accounts before year-end adjusting journal entries are made.
Adjusted trial balance
Unadjusted Trial balance
Post-closing Trial balance
pre-closing Trial balance
The assumption that states that businesses can divide up their activities into artificial time periods.
Business entity concept
Going concern concept
Monetary unit assumption
Periodicity assumption
As you move through the scope of financial planning from Cash Reserves and Equivalents to Income Assets to Equity Assets to Tangible Assets, what happens?
Risk increases, return decreases
Risk and return both increases
Risk and return both decreases
Risk decreases , return increases
The purpose of Income Assets is to provide a way for investors to obtain ______________.
a) Market Exposure
large returns
Income
Small returns
Tangible Assets are __________________ assets.
Guaranteed
Tax-advantaged
Hypothetical
none of these
A typical goal of financial planning is to pass _________________ to surviving family members.
Debt
Business interest
Loans
none of these
What is the traditional primary role of a Financial Planner?
To coordinate various aspects of client’s financial affairs such as investments, insurance and retirement planning
To minimize a client's tax burden through the use of credit sheltered trusts.
To facilitate, or broker, customer transactions in financial products such as stocks, bonds, and mutual funds.
none of these
Which one of the following is a working capital decision?
What is the cost of debt financing?
What is the cost of debt financing?
How should the firm raise additional capital to fund its expansion?
Which type of debt is best suited to finance our inventory?
How much cash should the firm keep in reserve?
Which one of the following is a capital structure decision?
selecting new equipment to purchase
Determining the optimal inventory level
Establishing the preferred debt-equity level
Setting the terms of sale for credit sales
Determining when suppliers should be paid
The primary goal of financial management is to maximize which one of the following for a corporation?
Revenue growth
The market value of existing stock
Number of shares outstanding
Current profits
Market share
Limited liability companies are primarily designed to:
Provide the benefits of the corporate structure to foreign-based entities
Allow companies to reorganize themselves through the bankruptcy process.
Provide limited liability while avoiding Double Taxation
Allow a portion of its owners to enjoy limited liability while granting the other portion of its owners control over the entity
