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FM-MIDTERM P5-6

Total questions: 15

Worksheet time: 30mins

Name
Class
Date
1.

What is the company's assets and liabilities in terms of the current market values?

a)

Market Value

b)

Net Asset Value

c)

Book Value

d)

Fair Value

2.

What is the net difference between the total discounted value of future cash flows and the investment at the present time?

a)

Internal Rate of Return

b)

Net Present Value

c)

Future Value

d)

Return on Investment

3.

What is a fixed cost in short, used to measure a company's cost structure?

a)

Operating Leverage

b)

Financial Leverage

c)

Profit Margin

d)

Gross Margin

4.

What is an investor's combined investment of risky and risk-less assets like stocks and T-bills, respectively?

a)

Diversified Portfolio

b)

Optimal Risky Portfolio

c)

Balanced Fund

d)

Growth Portfolio

5.

What is a contractual security giving the right of a buyer or seller to trade in main financial assets like stock, bond, foreign exchange, commodities, and interest rates?

a)

Futures Contract

b)

Derivative

c)

Option

d)

Swap

6.

What is the market network outside the organized stock exchange or option exchange, involving transactions between banks, dealers, brokers, and investors?

a)

OTC (Over-the-Counter Market)

b)

Stock Exchange

c)

Futures Market

d)

Private Equity Market

7.

What is the capital contributed by a company's shareholders and reported as stockholders' equity in the balance sheet?

a)

Paid-in Capital

b)

Retained Earnings

c)

Share Premium

d)

Treasury Stock

8.

What is the amount of money that the issuer promises to repay bondholders at the maturity date?

a)

Par Value of the Bond

b)

Coupon Rate

c)

Face Value

d)

Market Price

9.

What is the secondary market trading place for fixed-income securities like corporate and government securities in the Philippines?

a)

Philippine Stock Exchange (PSE)

b)

Philippine Dealing Exchange (PDEx)

c)

Makati Securities Exchange

d)

Philippine Futures Exchange

10.

What is the combination of a common stock and a stock put option used to protect a portfolio?

a)

Portfolio Insurance

b)

Hedging

c)

Covered Call

d)

Protective Put

11.

What model incorporates Bayesian methods to adjust option pricing based on new information and market conditions?

a)

Black-Scholes Model

b)

Portfolio-insurance Bayesian Option Pricing Model (PIBOPM)

c)

Binomial Option Pricing Model

d)

Monte Carlo Simulation

12.

What type of company's share gives the holder the right to receive a preferred dividend before net profit is distributed to the common shareholders?

a)

Common Stock

b)

Convertible Stock

c)

Preferred Stock

d)

Class A Stock

13.

What is the value of future cash flow or investment at the present time?

a)

Future Value

b)

Present Value

c)

Discounted Cash Flow

d)

Net Present Value

14.

What model focuses on the price differentials between related securities to determine option prices?

a)

Black-Scholes Model

b)

Price Differentials Option Pricing Model (PDCOPM)

c)

Binomial Model

d)

Option Delta Model

15.

What is the multiple of stock market price to earnings per share (EPS)?

a)

Dividend Yield

b)

Price-earnings Ratio (P/E Ratio)

c)

Return on Equity

d)

Earnings Per Share