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Business Finance Quarter 2

Total questions: 35

Worksheet time: 45mins

Name
Class
Date
1.

It is defined as money which is committed with an intention to earn a return over a period of time.

a)

Time Deposit

b)

Investment

c)

Bank deposit

d)

Bonds

2.

An investment that is made up of a pool of funds collected from many investors for the purpose of investing in stocks, bonds, and similar assets.

a)

Stocks

b)

Mutual Funds

c)

Real Estate

d)

Insurance

3.

A contract (policy) in which an individual or entity receives financial protection or reimbursement against losses from an insurance company.

a)

Stocks

b)

Mutual Funds

c)

Real Estate

d)

Insurance

4.

Money placed into a banking institution for safekeeping

a)

Insurance

b)

Bank Deposit

c)

Mutual Funds

d)

Bonds

5.

A depth Security issued by the government that have maturities of one year or less.

a)

Investment

b)

Inflation         

c)

Treasury Bills

d)

Diversification

6.

This is the general increase in prices.

a)

Investment

b)

Inflation

c)

Treasury Bills

d)

Diversification

7.

How price of an asset moves with respect to another asset.

a)

Diversification

b)

Inflation

c)

Dividends

d)

Correlation

8.

The following are different types of investments EXCEPT:

a)

Fixed Income and Equity

b)

Alternatives to Fixed Income and Equity

c)

Unit Investment Trust Fund

d)

Other Investment assets

9.

Statement I – Corporate bonds are long-term debt instruments issued by corporations.

    Statement II – Just like time deposits, bonds can also be pre-terminated by the investor.

a)

Only statement I is true

b)

Only statement II is False

c)

Statement I and II are True

d)

Statement I and II are False

10.

It is a property consisting of land and any improvements on it.

a)

Stocks

b)

Mutual Funds

c)

Real Estate

d)

Insurance

11.

It is the process of identification, analysis and acceptance or mitigation of uncertainty in investment decisions.

a)

Business Risk

b)

Financial Risk

c)

Risk management

d)

Investment Risk

12.

___________ refers to the risk created by the choice of capital structure – the financing mix of the issuing company. A company usually funds its operation through debt and equity financing. As the dept portion increases, it is also increasing.

a)

Business Risk

b)

Financial Risk

c)

Risk management

d)

Investment Risk

13.

These are the steps to minimize or reduce investment risk.

a)

Measure risk – Examine Solutions – Implement solutions – Monitor results – Identify Risk

b)

Identify risks - Measure Risks – Monitor Results – Examine Solutions - Implement Solutions

c)

Identify Risks – Measure Risks – Examine Solutions – Implement Solutions – Monitor Results

d)

Identify Risks – Measure Risks – Implement solutions – Examine Solutions – Monitor Results

14.

This one of the steps to reduce investment risk which determine whether the initiatives are effective and whether changes or update are required.

a)

Identify Risk

b)

Examine Solutions     

c)

Implement Solutions

d)

Monito Result

15.

What is the mean returns of stock X based on the returns of the 5-year below.

2015-15.25%

2016-18.50%

2017-13.20%

2018-11.26%

2019-17.46%

a)

79.46%

b)

16.89%

c)

15.89%

d)

15.79%

16.

____________ exists if the investment is denominated in another currency different from that of the local currency of the investor.

a)

Currency Risk

b)

Financial Risk

c)

Country Risk

d)

Exchange Rate Risk

17.

What is the variance of returns of Stock X based on the returns of the 5-year below. 

2015-15.25%

2016-18.50%

2017-13.20%

2018-11.26%

2019-17.46%

a)

0.001492        

b)

0.004921

c)

0.0012491

d)

0.001294

18.

Computing the variance involves the following steps:

a)

Get the mean – Get the squared difference – add the squared difference – get the difference of each return and the mean – divide by the number of periods

b)

Get the mean – get the difference of each return and the mean - Get the squared difference – add the squared difference – divide by the number of periods

c)

Get the mean – get the difference of each return and the mean - Get the squared difference – divide by the number of periods – add the squared difference

d)

Get the mean – get the difference of each return and the mean - add the squared difference – divide by the number of periods

19.

What is the first step in getting your personal finances under control?

a)

Determine your needs and wants

b)

Know the time value of money

c)

Determine and list your assets, liabilities and expenses

d)

Insure your needs

20.

Every Individual should practice this philosophy to achieve their set goals and objectives. One must learn to practice it properly account one’s resources.

a)

Financial Planning

b)

Money management

c)

Investment

d)

Personal Finance Decisions

21.

Who is the top 1 successful businessman who had accurately managed his personal expenses therefore he will be able to increase his net worth and become the most successful people in our time with the net worth of $14.4 B.

a)

Henry Sy        

b)

John Gokongwei, Jr.

c)

Andrew Tan

d)

Lucio Tan

22.

Spending Money, time or items toward future benefits for making more money is called ______.

a)

paying off

b)

borrowing       

c)

investing

d)

saving

23.

It is the term for the money that you earn.

a)

expense

b)

income

c)

savings

d)

interest

24.

Kurt Gabriel is in 5th grade. His dream is to be a lawyer one day. This is a __________.

a)

savings

b)

investment      

c)

short-term goal

d)

long-term goal

25.

John Paul started a college fund for his daughter when she was born. Each month he transfers P5,000 from his checking account to the fund. By doing this, he is both ______ and ______.

a)

spending and saving

b)

saving and investing

c)

saving and borrowing

d)

investing and borrowing

26.

Agreement to receive cash, goods, or services now and pay for them later is _________.

a)

income

b)

savings

c)

credit

d)

investment

27.

The term for the second-best choice or alternative a person gives up getting something else is ________.

a)

budget

b)

investment

c)

opportunity cost

d)

need

28.

Statement I – Buying clothes for sale is spending.

      Statement II – Selling used clothes is earning.

a)

Only statement I is true          

b)

Only statement II is false       

c)

Statement I and II are True

d)

Statement I and II are False

29.

Statement I – Investing is the process of placing our money in a bank through savings account.

      Statement II – Setting an emergency fund in the bank is considered investing.

a)

Only statement I is true

b)

Only statement II is false

c)

Statement I and II are True

d)

Statement I and II are False

30.

Statement I – Earning money can be through buying and selling real properties.

     Statement II – Cutting cost in business is considered investing.

a)

Only statement I is true

b)

Only statement II is true

c)

Statement I and II are True

d)

Statement I and II are False

31.

Each day after school, Kelly has volleyball. She could spend that time babysitting for extra cash. Babysitting is her _______.

a)

budget

b)

investment

c)

Opportunity cost

d)

short-term goal

32.

All of these are forms of cash.

a)

Checks, credit cards and coins

b)

Credit cards, checks and debit cards

c)

Currency, checks and debit cards

d)

Currency, coins and credit cards

33.

Who is most likely to have high finance charges?

a)

an individual who pays on time.

b)

A person who pays off credit card balances each month.

c)

A person with a bad credit history and a lot of debt.

d)

A customer who pays bills online.

34.

A store is offering 10% off for customers who use their store card. This is an example of making purchases using ___________.

a)

credit

b)

cash    

c)

currency

d)

Debit

35.

Ruth earns P30,000 a month. Her expenses per month are as follows:

            Food- P2,000              Travel Fund- P1,500

           Rent- P4,000               Utilities- P3,000

            Load- P1,000

            How much can Ruth allocate for her insurances and savings?

a)

P12,000 exclude beauty products

b)

P21,000 exclude load and travel fund

c)

P21,000 include load and travel fund

d)

P24,000 exclude food and rent