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FM-MIDTERM P1-2

Total questions: 40

Worksheet time: 1hrs 20mins

Name
Class
Date
1.

It is the annuity of interest on loan or bond payments, including partial principal payments.

a)

Arbitrage

b)

Amortization

c)

Annuity

d)

Back-door listing

2.

It is a series of cash flows, whether they are cash receipts or payments, with an equal amount over a certain period of time.

a)

Annuity

b)

Amortization

c)

Arbitrage

d)

Bond discount

3.

It is a transaction where one buys a certain financial asset in one market and sells it right away in another market.

a)

Bond indenture

b)

Black-Scholes Pricing Model

c)

Arbitrage

d)

Back-door listing

4.

It is done when a company that does not meet the requirements for listing acquires a listed company.

a)

Back-door listing

b)

Break-even sale

c)

Callable Bond Issuance

d)

Bond-with-warrant

5.

It is basically the company's net profit after deducting the preferred dividend payment from the outstanding shares.

a)

Break-even EPS

b)

Basic EPS

c)

Book value

d)

Bond discount

6.

It is a formula that helps to determine the fair price of European-style options, which are financial contracts giving the right to buy or sell an asset at a set price by a certain date.

a)

Bond premium

b)

Black-Scholes Pricing Model

c)

Capital budgeting

d)

Call option

7.

It is a long-term promissory note that promises to make principal payments at maturity and interest payments every period.

a)

Bond

b)

Bond indenture

c)

Bond discount

d)

Bond premium

8.

It comes from an understanding that two parties have come together and agreed to nurture a relationship of mutual interest and trust.

a)

Bond

b)

Bond indenture

c)

Capital rationing

d)

Call option

9.

It is offered when its selling price is less than the bond's par value.

a)

Bond premium

b)

Bond discount

c)

Bond-with-warrant

d)

Callable Bond Issuance

10.

It is a bond contract between the issuers and bondholders.

a)

Bond premium

b)

Bond indenture

c)

Capital rationing

d)

Book value

11.

It is offered when its selling price is greater than the bond's par value.

a)

Bond discount

b)

Bond indenture

c)

Bond premium

d)

Black-Scholes Pricing Model

12.

It is a bond that attaches to the stock warrant and gives the holders the right to buy a certain number of common shares.

a)

Break-even sale

b)

Bond-with-warrant

c)

Callable Bond Issuance

d)

Capital expenditure

13.

It is the net stockholders' equity or assets after deducting the company's liabilities but after excluding the preferred stock value.

a)

Book value

b)

Break-even sale

c)

Bond indenture

d)

Capital budgeting

14.

It is the level of similar EBIT for two financing strategies, debt and equity, which generate similar EPS.

a)

Break-even EPS

b)

Callable Bond Issuance

c)

Bond premium

d)

Basic EPS

15.

It is the equilibrium point where a company does not earn any profit or incur any loss.

a)

Break-even sale

b)

Bond indenture

c)

Callable Bond Issuance

d)

Black-Scholes Pricing Model

16.

It is the right to buy a common stock.

a)

Call option

b)

Callable Bond Issuance

c)

Break-even EPS

d)

Annuity

17.

It is basically repaying an old debt paying a high interest rate based on the stipulated call price anytime a low-interest rate situation prevails.

a)

Callable Bond Issuance

b)

Capital rationing

c)

Black-Scholes Pricing Model

d)

Break-even sale

18.

It is the process of evaluating and selecting long-term investments that are in line with a firm's strategic goals.

a)

Capital budgeting

b)

Callable Bond Issuance

c)

Capital expenditure

d)

Capital rationing

19.

It is the analysis of the worthiness of a CapEx investment from the point of view of the present value of its projected future cash inflows generated by the CapEx investment.

a)

Capital budgeting

b)

Capital rationing

c)

Callable Bond Issuance

d)

Break-even EPS

20.

It is fundamentally a fixed asset investment.

a)

Capital expenditure

b)

Bond indenture

c)

Callable Bond Issuance

d)

Book value

21.

It is the allocation of limited funds for several CapEx investments by maximizing the ones with the highest return at the lowest cost.

a)

Capital rationing

b)

Callable Bond Issuance

c)

Capital expenditure

d)

Bond-with-warrant

22.

It is similar to a company's capital structure or long-term sources of capital, like debt-related and equity amounts.

a)

Certificate of Deposit

b)

Capitalization

c)

Common stock

d)

Commodity futures

23.

It is issued by a commercial bank, which is negotiable in the money market for secondary trading.

a)

Certificate of Deposit

b)

Credit

c)

Credit Score

d)

Commercial paper

24.

It is an issued promissory note that is traded in the OTC of the secondary market.

a)

Common stock

b)

Corporate bonds

c)

Commercial paper

d)

Commodity futures

25.

They let people trade or manage risk on physical goods like oil or gold without directly buying them.

a)

Commodity futures

b)

Commodity Derivatives

c)

Convertible bond

d)

Credit Default Derivatives

26.

They are the rights given to the holder to sell a certain commodity at a specified strike price on a certain futures date.

a)

Coupon rate

b)

Commodity Derivatives

c)

Commodity futures

d)

Credit Information Corporation

27.

It is a company's share, which represents the holder's right to ownership, voting rights on determining the direction of the company, and dividend payments as a return.

a)

Common stock

b)

Corporate bonds

c)

Conversion ratio

d)

Certificate of Deposit

28.

It is the rate of return on a series of cash flows at the initial and terminal periods.

a)

Conversion value

b)

Correlation Coefficient

c)

Compounded annual growth rate

d)

Coupon rate

29.

It is the price per share at which a convertible security, such as corporate bonds or preferred shares, can be converted into common stock.

a)

Conversion ratio

b)

Conversion Price

c)

Convexity

d)

Conversion value

30.

It is the equivalence of Php 1,000 - nominal bond value with a certain number of common shares contained in a CB indenture.

a)

Conversion ratio

b)

Conversion Price

c)

Compounded annual growth rate

d)

Convexity

31.

It is the result of multiplying the common stock market price by the conversion ratio.

a)

Conversion Price

b)

Conversion value

c)

Compounded annual growth rate

d)

Correlation Coefficient

32.

It is a bond that is convertible into a number of common stocks at the option of its bondholders.

a)

Convertible bond

b)

Corporate bonds

c)

Coupon rate

d)

Capitalization

33.

It is a measure of the curvature in the relationship between the prices and yields of the debt-related instrument like bonds.

a)

Correlation Coefficient

b)

Convexity

c)

Conversion ratio

d)

Capitalization

34.

These are debt securities that companies issue to raise money for various purposes, such as expansion, purchasing equipment, or building a new plant.

a)

Corporate bonds

b)

Common stock

c)

Convertible bond

d)

Certificate of Deposit

35.

It is a measure that indicates the degree of dependency between two projects' returns, affecting the risk level when they are combined.

a)

Conversion value

b)

Correlation Coefficient

c)

Coupon rate

d)

Credit Score

36.

It is the nominal interest rate of a bond payable on a periodic basis, i.e., monthly, quarterly, semi-annually, and annually.

a)

Convexity

b)

Corporate bonds

c)

Coupon rate

d)

Credit Default Derivatives

37.

It is derived from the simple English word "trust," "belief," or "confidence" on one's reputation.

a)

Credit

b)

Certificate of Deposit

c)

Credit Score

d)

Credit Information Corporation

38.

They act like insurance for loans, where one party pays a fee to another to protect against the risk of a borrower not paying back.

a)

Commodity Derivatives

b)

Credit Default Derivatives

c)

Conversion ratio

d)

Coupon rate

39.

It regulates credit rating businesses in the Philippines, overseeing personal loans such as credit cards, housing loans, car loans, and salary loans.

a)

Certificate of Deposit

b)

Credit Default Derivatives

c)

Credit Information Corporation

d)

Credit Score

40.

It is an important yardstick used by personal loan providers in order to measure the efficiency and credit worthiness of the providers’ clients.

a)

Credit Score

b)

Credit Information Corporation

c)

Corporate bonds

d)

Convexity