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WorksheetsBFM COMPRE 2 FINALS
Total questions: 120
Worksheet time: 2hrs 55mins
Green banking reduces personnel and printing costs for the bank.
True
False
Banks are regulated by international, federal, state, and local agencies.
True
False
Money center banks are not vulnerable to global market conditions.
True
False
Central banks oversee a country’s banking system.
True
False
A consumer may view his or her account balances from an ATM.
True
False
Banks can reveal their customers’ personal information to other individuals and
businesses.
True
False
One reason consumers have bank accounts is to keep their money secure.
True
False
The FDIC insures securities sold by a bank
True
False
The Federal Reserve Bank is the largest automated clearinghouse in the United States.
True
False
Financial transactions are essential for economic growth
True
False
As mandated by law, the Central Bank via the Monetary Board, occupies a very peculiar position of giving advice to government, its political subdivision, and instrumentalities.
True
False
An example of bank capital build-up is the upgrading of interest on deposits.
True
False
Monetary Board has the unique right to offer advice, and to press such advice even to the point of nagging; but always of course subject to the supreme authority of the government.
True
False
Central Bank is organized or created for the purpose of profit-making or profit-seeking venture.
True
False
Monetary Authority was "to ensure a strong monetary foundation and adequate resource inputs to the development process.
True
False
Monetary Board is vested with monetary and credit authority.
True
False
The abandonment of the Fiat and Commodity Money gave way to a new era of monetary system.
True
False
Bank consolidation or merger is being discouraged by the Central Bank.
True
False
Monetary Board has the power to authorize such expenditures of the Central Bank in the interest of its effective administration and operations.
True
False
The members of the Monetary board are the governor of the Central Bank as the chairman, a cabinet member and 5 members from the public sector.
True
False
A controller is the head of accountant of the company
True
False
A decline function is one that is directly involved in the core operations of the company
True
False
He serves as the protector of a company’s value and finances from financial risk that arises from business activities. He manages the company’s cash flows and ensure that the company meets the financial goals expressed in the budget.
Treasurer
Accountant
Controller
VP for Finance
A treasurer has the following responsibilities except:
Keep the bankers of the company updated to the company’s financial condition and projections as well as its possible needing of borrowed funds
Manage cash flow of the business
Obtain loans and other forms of credit from outside sources
Analyze investment prospects to minimize use of company’s unused cash and assets
Which is a role of a controller?
Improving reporting to add value to the company
Audit the reports done by the accountants
Which is not a role of a controller?
Optimizing business processes
Recruiting & nurturing the finance team
Ensuring accuracy in all basic job functions
Audit the work of the accountant
Financial controllers must ensure their reporting of Non-financial Key Performance Indicators.
True
False
Staff function provides support to the organization.
True
False
It is the function of business management that combines accounting, operating controls, auditing, taxes and other related areas. deals with records, systems, and processes to attain the objectives of and good managing
Treasurership/treasurer
Controllership/controller
Knows the source of money and exercises prudence in using the money of an organization. It is commonly responsible for handling financial activities.
Treasurership/treasurer
Controllership/controller
Fluctuation of interest rates is an example of company-specific matters that affect the value of an equity.
TRUE
FALSE
Which of the following statements is FALSE regarding bonds?
If the par value is lower than the market price, then the yield-to-maturity must be lower than the coupon rate.
If the market price is lower than the par value, then the coupon rate must be lower than the yield-to-maturity.
Both A and B are false.
None of the above are false.
What is a coupon?
something you use in a supermarket to decrease your cost
an asset bought in the stock market
used in the stock market to lessen the initial cost of stocks
the interest rate on a bond at the time it is issued
A bond which has a yield to maturity greater than its coupon rate will sell for a price
below par
at par
above par
equal to face value of bond plus the interest payments
The rate of interest on a bond is called the ________ .
bond rate
coupon rate
discount rate
interest rate
A bond issued by a corporation is called a ________ .
corporate bond
market share
stock option
share of stock
When the price of bond is calculated below its par value, it is classified as...
classified bond
discount bond
compound bond
consideration earnings
Which of the following statements is FALSE regarding bonds?
If the par value is lower than the market price, then the yield-to-maturity must be lower than the coupon rate.
If the market price is lower than the par value, then the coupon rate must be lower than the yield-to-maturity.
Both A and B are false.
None of the above are false.
Long-term bonds are ... than short-term bonds.
more liquid
less risky
less sensitive to interest rate changes
subject to more uncertainty
A corporation sells its stock or debt directly to investors without going through a financial institution.
Direct Transfer
Indirect Transfer
Multi-Transfer
Interbank Transfer
What is the main purpose of insurance in risk management?
To eliminate all risks
To transfer risks to another party
To avoid all risks
To increase the likelihood of risks
Which risk management technique involves the installation of fire alarms and sprinkler systems?
Risk transfer
Risk evasion
Risk reduction
Risk retention
What is the primary purpose of liability insurance?
To cover damage to property
To protect against financial loss from lawsuits
To provide medical coverage
To insure against natural disasters
What is an example of assuming risk?
Insurance deductible amount
Business insurance
Health insurance
Life insurance
What is the term for the state of being responsible for something, especially by law?
Accountability
Obligation
Responsibility
Liability
How can you ensure a steady income during your retirement years?
Investing in stocks and bonds
Government pension plans and 401(k)
Monthly annuity payments
All of the above
What is the term for anything that has an adverse effect on your financial goals?
Anticipated
Unanticipated
Anticipated or unanticipated
What are some examples of risks that can be identified in a business environment?
market risks
cybersecurity risks
human resources risks
financial risks, operational risks, strategic risks, compliance risks, and reputational risks
What are the limitations of risk identification?
Overemphasis on certain risks, failure to consider external factors, lack of risk management framework
Ineffective communication, resistance to change, lack of stakeholder involvement
Limited knowledge or experience, biases and assumptions, lack of data or information, time constraints, and difficulty in predicting future events.
Lack of resources, conflicting priorities, inadequate tools or techniques
How can risk identification help in decision-making?
By ignoring potential risks and blindly choosing a course of action.
By wasting time and resources on unnecessary analysis.
By increasing the likelihood of making the wrong decision.
By identifying potential risks and uncertainties associated with different options or courses of action.
BANK OVERDRAFT IS A FORM OF
SHORT TERM FUNDS
LONG TERM FUNDS
BOTH
NONE OF THE ABOVE
CAPITAL STRUCTURE DENOTES THE COMPOSITION OF
SHARE CAPITAL
LONG TERM AND SHORT TERM DEBTS
DEBT AND EQUITY
RESERVES AND SURPLUS
External sources of funds are
(A) Funds from long term loans
(B) Sale of fixed assets
(C) Both (A) and (B)
(D) None of the above
Break-even point is that level of sales revenue at which there is ________
(A) Profit
(B) Loss
(C) No profit no loss
(D) None of the above
Operating leverage =
(A) Contribution x Earnings before interest and tax
B) Contribution / Earnings before interest and tax
(C) Earnings before interest and tax / Contribution
(D) Earnings before interest and tax + Contribution
EBIT stands for
Earnings before Interest and Tax
Earnings before Interest and Tariff
Earn before Interest and Tax
Earnings before Investment and Tax
Cash flow management:
Ensures adequate liquidity to meet short-term obligations
Manages working capital
Invests surplus funds effectively
All of the above
Risk management:
Helps identify and mitigate financial risks
Protects a company's assets
Reduces the company's exposure to risk
All of the above
Capital budgeting:
Involves evaluating investment opportunities to determine which projects will generate the highest return on investment
Helps businesses make informed financial decisions
Both of the above
Neither of the above
Financial planning and budgeting:
Helps businesses set financial goals, allocate resources, and create budgets to guide their operations
Ensures that a company has the resources it needs to achieve its goals
Both of the above
Neither of the above
What are the key components of a balanced scorecard?
Financial, customer, internal processes, learning and growth
Marketing, sales, operations, human resources
Profit, revenue, market share, employee satisfaction
Product, price, place, promotion
How can balance scorecard assessments contribute to business success?
By improving financial performance
By enhancing customer satisfaction
By optimizing internal business processes
By fostering learning and growth
What is the purpose of balance scorecard assessments?
To measure the financial performance of a company
To evaluate the customer satisfaction of a company
To assess the internal business processes of a company
To analyze the learning and growth of a company
How can supply chain assessment contribute to decision-making?
By providing insights into supply chain performance
By focusing on short-term goals
By ignoring potential risks
By relying on intuition
What is the role of supply chain assessment in business?
To identify bottlenecks in the supply chain
To reduce operational costs
To increase employee satisfaction
To expand into new markets
What is the role of competitor analysis in business strategy?
Identifying new target markets
Reducing operational costs
Increasing employee satisfaction
Expanding into new markets
What are the benefits of conducting competitor analysis?
Improved competitive advantage
Increased customer satisfaction
Enhanced financial performance
Expanded market share
What is the purpose of industry analysis in business?
To identify new opportunities
To reduce operational costs
To increase employee satisfaction
To expand into new markets
How does industry analysis contribute to decision-making?
By providing insights into market trends
By focusing on short-term goals
By ignoring potential risks
By relying on intuition
What are some strategies for performance improvement?
Setting clear goals and objectives
Providing regular feedback and coaching
Implementing performance incentives
Offering training and development opportunities
The word which means "writing off certain expenses by dividing them into fixed payments over a period of time" is ...
amortization
debentures
occupancy
premises
Which of these are methods that could be used to improve cash flow.
Reducing costs by buying from a different supplier.
Increasing its revenue by slightly raising its prices.
Selling off some fixed assets.
Paying back all of the refunds it owes customers
Expanding into a new range of products.
Buying too many fixed assets drains cash, a possible solution is
Never renting
Increasing production
Reducing production
Leasing and renting
Cash flow forecasts can show two of the following...
Whether a business will make a profit
Whether a business has sufficient cash to meet their debt obligations
Whether a business will be able to repay a loan
Whether a business has enough shareholders
How do you calculate net cash flow?
Balance brought forward + Cash Inflows
Inflows - Outflows
Total cash available - cash outflows
None of the above
Comparative advantage is the accomplishment of a high level of productivity that is characterized by efficiency in the context of lean and quantifiable management.
YES
NO
What is the initial measurement of the financial asset
Fair Value
Face Value
At Cost
Amortized Cost
Which one of the following types of securities has no priority in a bankruptcy proceeding?
Convertible bond
Senior debt
Common stock
Preferred stock
Straight bond
Capital market is efficient, if the prices of securities which are traded in the market react to the changes of situation immediately, fully and credibly reflect all the important information about the security’s future income and risk-related with generating this income.
True
False
Market efficiency means that the price which investor is paying for financial asset (stock, bond, other security) partially reflects fair or true information about the intrinsic value of this specific asset or fairly describes the value of the company, the issuer of this security.
True
False
The income objectives differ from stability of principal in that; there is no specific prescription against declines in principal values.
True
False
Under the strong form of efficiency stock prices are assumed to reflect any information that may be contained in the past history of the stock prices.
True
False
A concept of investment that means addition to the capital stock of the society or the goods used in producing other goods
Economic Investment
Financial Investment
Economic Management
Economic Concept
This means an investment can easily be market
Marketability
Safety
Liquidity
Risk
This implies the certainty of return of capital without any loss of money or time
Safety
Return
Liquidity
Risk
This is the uncertain circumstances in the future
Safety
Return
Liquidity
Risk
The goal of this phase is to generate a portfolio that provide the highest returns at a given level of risk
Portfolio Selection
Portfolio Analysis
Portfolio Evaluation
Portfolio Revision
What is an opportunity cost?
The think you choose when you make a decison.
The cost of going to a movie.
The thing you give up when you make a choice
An opportunity to spend money.
Having a(n) __________ means the amount of your liabilities is larger than the value of your assets.
Personal Finance
Asset
Negative Net Worth
Interest
_________ means having the knowledge and skills to manage your personal finances.
Interest
Financial Literacy
Paycheck to Paycheck
Interest Rate
Which of the following is the MOST financially responsible decision?
Kate sold her old bike helmet for $10 to a friend. She gave the $10 to her favorite charity.
Jared gets $50 for his birthday from his grandma. He spends $75 on XBox games.
Sue was paid $25 for helping her neighbor in the yard. She spent $20 on a t-shirt and $5 on ice cream at the mall.
Jerry earns $100 lifeguarding. He spent $5 on lunch and put the other $95 in the bank.
What elements should be included on a budget? Check all that apply.
A list of chores you complete.
How much money you earned on chores.
A list of all the things you want to buy.
How much money you plan to spend to buy different items.
James wants to be the richest person in the world. Which of the following should he include in his personal budget now to make this happen?
How he plans to save money over a long period of time.
How many Pokemon cards he will trade with friends.
How he plans to increase his expenditures this coming year.
How he plans to spend money on himself and others.
A balanced budget is when income is equal to or greater than expenses.
True
False
A budget helps people make responsible economic decisions.
True
False
Which of the following is a benefit of having a personal savings plan?
Personal savings plans let people spend more time doing activities they enjoy.
People who save money are able to spend more money in the future and pay for unexpected expenses.
People who save money are able to spend a lot of money right now.
Personal savings plans help people have an unbalanced budget.
The __________ contains information on the inflows and outflows of the business.
Cash budget
Financial Budget
Commercial, real state, and agricultural loans have to be covered sufficiently by collateral.
True
False
In cooperatives, the loan portfolio is limited by the type of loan.
True
False
You can borrow up to P2,500 per month, but you are only required to make a minimum payment (paying off the loan in full is not required).
REVOLVING CREDIT
INSTALLMENT
OPEN CREDIT
You are able to borrow up to P5,000 per month but must pay for all the funds borrowed each month.
REVOLVING CREDIT
INSTALLMENT
OPEN CREDIT
Each month, you are required to pay P500 until the loan is paid off in full.
REVOLVING CREDIT
INSTALLMENT
OPEN CREDIT
Credit still refers to an agreement to purchase a product or service with the express promise to pay for it later. This is known as buying on credit.
TRUE
FALSE
The debtor promises to repay the lender, often with interest, or risk financial or legal penalties.
TRUE
FALSE
Credit is essentially a social relation that forms between a creditor (debtor) and a borrower (lender).
TRUE
FALSE
To an accountant, credit often refers to a bookkeeping entry that either increases assets or decreases liabilities and equity on a company's balance sheet.
TRUE
FALSE
Credit is generally defined as a contract agreement in which a borrower receives a sum of money or something of value and repays the lender at a later date, generally without interest.
TRUE
FALSE
What is a disadvantage of being an entrepreneur?
You have more control over your work
You have a more flexible schedule
You do not always receive a regular paycheck
Your work schedule is always predictable
Full form of MSME is
a. Mini, small and Micro Enterprises
b. Micro, Small and Medium Enterprises
c. micro, Small and Macro enterprises
d. Micro, small and Mini Enterprises
Which of the following is not a common reason for the failure of small businesses?
A lack of sufficient start-up money
Shortage of skilled workers
lack of management experience
failure to manage credit offered to customers
A(n) ____ is an invention or creation that is brand new.
Development
Improvement
Innovation
Advancement
