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WorksheetsFINAL TEST FOR CURRENT CONTROL
Total questions: 150
Worksheet time: 2hrs 53mins
Name
Class
Date
1.
What term describes the importance or influence of something in relation to society and the economy?
a)
Socioeconomic significance
b)
Social impact
c)
Economic value
d)
Social responsibility
2.
What are the four major types of financial decisions that finance functions involve?
a)
Investment, liquidity, financial, and dividend decisions
b)
Budgeting, forecasting, reporting, and auditing decisions
c)
Saving, investing, borrowing, and lending decisions
d)
Income, expenditure, asset, and liability decisions
3.
What is the form of applied economics that uses quantitative data, statistics, and economic theory to optimize the goals of a corporation or other business entity?
a)
Business finance
b)
Financial management
c)
Financial accounting
d)
Financial economics
4.
What is the term that describes the optimal mix of debt and equity that minimizes the cost of capital and maximizes the value of the firm?
a)
Capital structure
b)
Capital budgeting
c)
Capital rationing
d)
Capital adequacy
5.
What kind of decisions involves deciding how much of the earnings should be retained in the business and how much should be distributed to the shareholders?
a)
Dividend decision
b)
Financing decision
c)
Investment decision
d)
Liquidity decision
6.
What are the four essential topics in modern finance that are covered in the “Fundamentals of Finance” course?
a)
Financial statement analysis, time value of money, risk and return, and capital budgeting
b)
Investment decision, financing decision, dividend decision, and liquidity decision
c)
Financial markets and institutions, interest rates and bond valuation, stock valuation, and capital structure
d)
Financial planning and forecasting, working capital management, options and derivatives, and international finance
7.
What is the term for the amount of money received from an investment, such as dividends or interest payments?
a)
Income
b)
Capital gain or loss
c)
Expenses
d)
Costs
8.
What is the principle of business ethics that incorporates other principles such as honesty, trustworthiness, and reliability?
a)
Integrity
b)
Accountability
c)
Leadership
d)
Responsibility
9.
In which of the following answers is the definition of the term “finance” given?
a)
Finance is a system of monetary relations that has an imperative form and is associated with the formation, distribution and use of monetary funds
b)
Finance is a set of legal relations arising in real money turnover regarding the formation, distribution and use of centralized funds of financial resources
c)
Finance is a barter relationship between individuals and legal entities
d)
Finance is a social relationship between individual groups of citizens
10.
What is the goal of the financial manager?
a)
To maximize the value of the firm
b)
To minimize the cost of capital
c)
To maximize the profit margin
d)
To minimize the risk exposure
11.
What is the term for the rate of interest paid on deposits and other investments?
a)
Market interest rate
b)
Stated (fixed) interest rate
c)
Discount interest rate
d)
Effective interest rate
12.
What is the name of the market where companies sell new securities to raise funds?
a)
Primary market
b)
Secondary market
c)
Tertiary market
d)
Quaternary market
13.
What is the term for the difference between the price paid by investors and the price received by the issuing company in a public offering?
a)
Spread
b)
Margin
c)
Commission
d)
Fee
14.
What is the type of financing where a company sells a portion of its ownership to investors in exchange for funds?
a)
Equity financing
b)
Debt financing
c)
Hybrid financing
d)
Asset-based financing
15.
What is the name of the process where a private company becomes a public company by selling its shares to the general public for the first time?
a)
Initial public offering (IPO)
b)
Seasoned equity offering (SEO)
c)
Private placement
d)
Reverse merger
16.
Which theory of the term structure of interest rates assumes that investors have no preference for any particular maturity and are only concerned with the expected return?
a)
Expectations theory
b)
Market segmentation theory
c)
Liquidity preference theory
d)
None of the above
17.
What is shareholder’s equity?
a)
The carrying or book value of the ownership of a company
b)
A summary of operating performance
c)
Explicit contracts that a company has
d)
A financial statement that provides aggregate data regarding all cash inflows
18.
Select the option that contains only liabilities.
a)
Payables, provisions
b)
Taxes, property
c)
Provisions, equipment
d)
Inventories, non-controlling interests
19.
Identify 4 building blocks of analysis.
a)
Liquidity & efficiency, solvency, market, profitability
b)
Market, validity, efficiency, credibility
c)
Liquidity, reliability, solvency, validity
d)
Profitability, stability, modernity, market
20.
What is the primary difference between GAAP and IFRS systems?
a)
GAAP is rules-based and IFRS is principle-based
b)
IFRS doesn't include accounting characteristics
c)
GAAP doesn't include the inventory expenses
d)
IFRS is rules-based and GAAP is principle-based
21.
IFRS is not standard in what country or region?
a)
The United States
b)
The European Union
c)
Japan
d)
South Korea
22.
What are the three sections of the Statement of Cash Flows?
a)
Operating Activities, Financing Activities, and Investing Activities
b)
Income, Expense, and Equity
c)
Assets, Liabilities, and Equity
d)
Cash Inflows, Cash Outflows, and Net Cash Flow
23.
Which financial statement shows the cash inflows and outflows of a business?
a)
Statement of Cash Flows
b)
Income Statement
c)
Statement of Retained Earnings
d)
Balance Sheet
24.
What is financial analysis?
a)
The process of evaluating businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability
b)
The process of planning businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability
c)
The process of organizing businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability
d)
The process of controlling businesses, projects, budgets, and other finance-related transactions to determine their performance and suitability
25.
What do we call cash, cash equivalents, accounts receivable, stock inventory, pre-paid liabilities and other liquid assets with simple words?
a)
Current assets
b)
Current ratio
c)
Current liabilities
d)
Operating profit
26.
Which ratio is considered as safe margin of solvency?
a)
Current ratio
b)
Quick ratio
c)
Acid-test ratio
d)
Return on salary
27.
Determine current ratio, if current assets are 2,000,000 USD and current liabilities are 1,000,000 USD?
a)
02:01:00
b)
1.5:1
c)
03:01:00
d)
04:01:00
28.
Determine current ratio, if current assets are 3,000,000 USD and current liabilities are 1,000,000 USD?
a)
03:01:00
b)
02:01:00
c)
1.7:1
d)
1:1.5
29.
Determine the asset turnover ratio, if net sales is 2,000,000 USD and average total assets is 500,000 USD?
a)
4
b)
0.25
c)
5
d)
0.35
30.
Determine the asset turnover ratio, if net sales is 1,000,000 and average total assets is 200,000?
a)
5
b)
4
c)
0.3
d)
0.4
31.
What are the names of the ratios that measure the ability of the company to pay its short-term debts?
a)
Liquidity ratios
b)
Debt ratios
c)
Interest coverage ratios
d)
Profitability ratios
32.
How is the quick ratio determined?
a)
Current assets less inventory, divided by current liabilities
b)
Current assets divided by total debt
c)
Current assets divided by current liabilities
d)
Current assets less inventory, divided by total liabilities
33.
Why does preference rest on the time value of money?
a)
Money available today is worth more than the same amount of money in the future
b)
Money received tomorrow can be invested to earn stocks
c)
Money available today is worth more than stocks
d)
Money received today is worth less than the same amount of money in the future
34.
What is an important principle in finance?
a)
The value of money is time-dependent
b)
The value of a unit of money is similar in different time periods
c)
The value of a sum of money received today will not be received
d)
The time value of money will not be referred as time preference for money
35.
Suppose you can buy 1 kg of rice for 50 cents today. If the inflation rate is 10%, how many cents will you need a year later?
a)
55 cents
b)
50 cents
c)
45 cents
d)
60 cents
36.
What is the principle of “bird in the hand”?
a)
Money received now is certain, whereas money tomorrow is less certain
b)
Money received now is less certain, whereas money tomorrow is certain
c)
Value of money is time-dependent
d)
Money received yesterday can be invested to earn stocks
37.
What are the methods to calculate the time value of money?
a)
Compounding technique, discounting technique
b)
Compounding technique, money exchange technique
c)
Annual-compounding technique
d)
Discounting technique, money exchange technique
38.
What is interest?
a)
A rate that is charged or paid for the use of money
b)
A rate that assumes no risk or uncertainty
c)
A rate that expects aggregate prices to rise
d)
A rate that expects stock valuation
39.
When do you pay interest to the bank?
a)
When you borrow money from a bank
b)
When you deposit money into a bank
c)
When you are the client of the bank
d)
When you work in the bank
40.
When does the bank pay interest to a person?
a)
When a person deposits money into a bank
b)
When a person borrows money from a bank
c)
When a person is the client of the bank
d)
When a person works in the bank
41.
What is the future value of the money?
a)
The value of an asset at a specific date in the future
b)
The value which includes corrections for inflation or other factors
c)
The value of a cash flow
d)
The value in which the cash flows are all equal and occur at regular intervals
42.
What are the components of return?
a)
Capital gains and income
b)
Income, the rate of inflation
c)
Dividend yield, earning growth
d)
Capital gains, earning growth, the inflation rate
43.
What does the sum of the income and the capital gain (or loss) earned on an investment over a specified period of time mean?
a)
Total return
b)
Rate of return
c)
Return on investment
d)
Internal rate of return
44.
What is the definition of the holding return?
a)
The period of time over which an investor wishes to measure the return on an investment vehicle
b)
The geometric average amount of money earned by an investment each year over a given time period
c)
A ratio that depicts the number of days for which an organization holds inventory before sales
d)
A financial ratio that shows how well a company is managing the capital that shareholders have invested in it
45.
What is the advantages of holding period of return?
a)
Easy to calculate and to understand, considers income and growth
b)
Pooling risk, reducing cost, and providing economies of scale
c)
Increases foreign direct investment, reduces the monopoly of the public sector
d)
Promotes economic growth, increased competition
46.
What is the risk-return tradeoff?
a)
Is the relationship between risk and return, in which investments with more risk should provide higher returns, and vice versa
b)
A strategy to balance risk and returns by investing in different asset classes
c)
Measures directed at diluting or dismantling regulatory control over the institutional structures, instruments
d)
An entity that acts as the middleman between two parties in a financial transaction
47.
Give examples for market risk
a)
Stock market decline on bad news, political upheaval, changes in economic conditions
b)
Decline in company profits or market share, bad management decisions
c)
Company can't get additional loans for growth or to fund operations
d)
Market values of existing bonds decrease as market interest rates increase
48.
What is the realized return?
a)
Realized return is a current return actually received by an investor during the given return period
b)
Realized return occurs when the value of an asset has increased or decreased, but it has not yet been sold
c)
Realized return is a measure of a company's financial performance that shows the relationship between a company's profit and the investor's return
d)
Realized return measures how much net income or profit is generated as a percentage of revenue
49.
What is business risk?
a)
Business risk is the degree of uncertainty associated with an investment's earnings and the investment's ability to pay the returns owed to investors
b)
Business risk is the period of time over which an investor wishes to measure the return on an investment vehicle
c)
Business risk is current risk actually received by an investor during the given return period
d)
Business risk is the chance that the actual return from an investment may differ from what is expected
50.
What is a type of debt or long-term promissory note, issued by the borrower, promising to pay its holder a predetermined and fixed amount of interest per year and the face value of the bond at maturity?
a)
Bond
b)
Loan
c)
Share
d)
Stock
51.
Which bond is secured by a lien on real property?
a)
Mortgage bond
b)
Eurobond
c)
Convertible bond
d)
Callable bond
52.
What is a special type of bond that can be exchanged into some more junior grade of securities (usually into common stock)?
a)
A convertible bond
b)
A Eurobond
c)
A callable bond
d)
A mortgage bond
53.
Who issues Treasury bonds in the USA?
a)
The federal government
b)
State and local governments
c)
Corporations
d)
Foreign governments and foreign corporations
54.
Who issues municipal bonds in the USA?
a)
State and local governments only
b)
The federal government only
c)
Corporations only
d)
Foreign governments and foreign corporations only
55.
What is the process of diversifying an investment portfolio across various asset categories, like stocks and bonds and cash to balance the risk/reward tradeoff?
a)
Asset allocation
b)
Bond allocation
c)
Stock allocation
d)
Cash allocation
56.
Which bonds do not need paying any interest over the life of the bond?
a)
Zero coupon bonds
b)
Floating rate bonds
c)
Junk bonds
d)
Convertible bonds
57.
What is the name of the rate at which the present value of all future interest payments and the principal payment is equal to the current bond price?
a)
Yield-to-maturity
b)
Dividend yield
c)
Nominal yield
d)
Current yield
58.
What is the name of bonds, issued in a country different from the one in which the currency of the bond is denominated?
a)
The Eurobonds
b)
The convertible bonds
c)
The junk bonds
d)
The callable bonds
59.
What does the share's valuation process determine?
a)
Economic worth of a company's stock
b)
The percentage of owned shares from the company
c)
A share price
d)
Rate of return of the issuer of shares
60.
What are the main factors affecting valuation of shares?
a)
Demand and supply for shares, past performance of the company, growth prospectus of the company
b)
Industry indicators, the economic climate, external factors
c)
Complexity of a lot of financial transactions, external and internal factors
d)
Personal income tax rate
61.
What are the main methods used to value shares?
a)
Dual (or fair value) method, net assets basis (or intrinsic value) method, yield basis method
b)
Principal, portfolio, capital assets pricing, yield basis method
c)
Yield basis method, capital assets pricing
d)
Total debt / shareholder's equity, yield basis method, principal, sourcing the capital
62.
Which security does not have a maturity date?
a)
Common stock
b)
Futures
c)
Bonds
d)
Every security must have a maturity date
63.
Choose the correct formula to calculate the return on equity (ROE).
a)
Net income / common book value
b)
Operating profits / total assets
c)
Cash + accounts receivable / current liabilities
d)
Operating profits / sales
64.
Choose the correct formula for net tangible assets.
a)
Total assets − intangible assets – liabilities
b)
Net revenue – current liabilities
c)
Sales / total assets
d)
Financial asset / liability
65.
Choose the correct formula for calculation of expected return.
a)
Expected profits / equity share capital *100
b)
Operating profits / total liabilities
c)
Expected profits / total liabilities * 100
d)
Operating profits / normal rate
66.
Choose the correct formula for the calculation of the value of a share.
a)
Expected rate / normal rate * paid-up value of one share
b)
Expected profits / equity share capital * 100
c)
Total dividends / net income * 100
d)
Financing profits / total liabilities
67.
Choose the correct formula for the calculation of book value per share.
a)
Company's common equity value/total number of shares
b)
Dividend in 1 year / required rate of return-growth rate
c)
Expected profits / debt capital * 100
d)
Total dividends / total income * 100
68.
Which of the following represents the number of years needed to recover the initial cash outlay related to an investment?
a)
Payback period
b)
Maturity period
c)
Recovery period
d)
Turnover period
69.
What is capital budgeting?
a)
The process of decision making with respect to investments made in fixed assets
b)
The process of making business decisions involving money
c)
The process of making economic decisions within the corporation or partnership
d)
The process of making important decisions regarding firm's disposal
70.
How could you define the present value of an investment's annual free cash flows less the investment's initial outlay?
a)
Net present value
b)
Future value
c)
Deferred annuity
d)
Present value
71.
What value should the profitability index (PI) have for the project to be accepted?
a)
The profitability index should be greater than or equal to 1.00
b)
The profitability index should be less than or equal to 1.00
c)
The profitability index should be greater than 0.00 but less than 1.00
d)
The profitability index should be less than 0.00
72.
Which measure attempts to answer the question, what rate of return does the project earn?
a)
Internal rate of return
b)
External rate of return
c)
Return on investment
d)
Return on equity
73.
What is a graph showing how a project's NPV changes as the discount rate changes?
a)
Net present value profile
b)
Discount rate chart
c)
Net present value outflow
d)
Discount rate ratio
74.
What is capital rationing?
a)
The situation in which a firm may place a limit on the dollar size of the capital budget
b)
The situation in which a firm may place a limit on the investment's return
c)
The situation in which a firm may place a limit on the cost of sales
d)
The situation in which a firm may place a limit on times interest earned
75.
What are the names of the projects that, if implemented, will serve the same purpose?
a)
Mutually exclusive projects
b)
Mutually inclusive projects
c)
Neutrally accepted projects
d)
Neutrally secure projects
76.
The only difference between discounted payback period method and traditional payback period method is?
a)
Discounted payback period method uses discounted free cash flows in calculating the payback period
b)
Discounted payback period method uses present value of money in calculating the payback period
c)
Discounted payback period method uses future value of money in calculating the payback period
d)
Discounted payback period method uses actual undiscounted free cash flows in calculating the payback period
77.
What is a holding-period return?
a)
The rate of return earned on an investment, which equals the dollar gain divided by the amount invested
b)
The arithmetic mean or average of all possible outcomes where those outcomes are weighted by the probability that each will occur
c)
The potential variability in future cash flows
d)
Computing the variance in the possible investment returns
78.
What is expected rate of return?
a)
It is the arithmetic mean or average of all possible outcomes where those outcomes are weighted by the probability that each will occur
b)
It is the rate of return earned on an investment, which equals the dollar gain divided by the amount invested
c)
It is the potential variability in future cash flows
d)
It is computing the variance in the possible investment returns
79.
What is the name of the potential variability in future cash flows?
a)
Risk
b)
Expected return cost
c)
Realized rate of return
d)
Standard variation
80.
What is systematic risk?
a)
The risk related to an investment return that cannot be eliminated through diversification
b)
The risk related to an investment return that can be eliminated through diversification
c)
Company unique risk or diversifiable risk
d)
The result of factors that are unique to the particular firm
81.
What is unsystematic risk?
a)
The risk related to an investment return that can be eliminated through diversification
b)
The risk related to an investment return that cannot be eliminated through diversification
c)
Company expected risk
d)
The result of factors that are general to any firm
82.
What is the minimum rate of return necessary to attract an investor to purchase or hold a security?
a)
Required rate of return
b)
Expected rate of return
c)
Risk
d)
Fixed interest rate
83.
What is risk premium?
a)
The additional return expected for assuming risk
b)
Required rate of return, or discount rate, for riskless investments
c)
A model stating that the expected rate of return on an investment
d)
The return line that reflects the attitudes of investors
84.
What is risk-free rate of return?
a)
It is the required rate of return, or discount rate, for riskless investments
b)
It is the additional return expected for assuming risk
c)
It is a model stating that the expected rate of return on an investment
d)
It is the return line that reflects the attitudes of investors
85.
What is the name for diversification between different types of assets?
a)
Asset allocation
b)
Beta
c)
Characteristic line
d)
Market risk
86.
What metric measures the average relationship between stock returns and market returns?
a)
It is beta
b)
It is asset allocation
c)
It is characteristic line
d)
It is market risk
87.
Which stakeholder(s) benefit from dividend distribution?
a)
Shareholders only
b)
Employees only
c)
Shareholders and employees
d)
Customers and suppliers
88.
According to the viewpoint that dividends are important, what is the relationship between dividend policy and stock prices?
a)
Dividend policy has a direct impact on stock prices
b)
Dividend policy has no impact on stock prices
c)
Dividend policy only affects stock prices temporarily
d)
Dividend policy indirectly influences stock prices
89.
What is the definition of dividends?
a)
The distribution of net profits among shareholders
b)
The total profits of a business concern
c)
The investment decisions made by financial managers
d)
The financing decisions made by shareholders
90.
What are agency costs?
a)
The costs resulting from conflicts between stockholders and management
b)
The costs incurred by a firm's management
c)
The costs of information effects on dividend policy
d)
The costs of financial decisions within a firm
91.
What is the primary purpose of a stock split?
a)
To decrease the stock price per share
b)
To increase the total number of local governement bonds
c)
To decrease the total number of local governement bonds
d)
To increase the stock price per share
92.
What do small and medium-sized company owners prefer in terms of financing new investments?
a)
Taking on debt and using retained earnings
b)
Issuing new common stock
c)
Selling existing assets
d)
Seeking venture capital
93.
A small company has $500,000 in retained earnings and wants to finance a new investment project. The project requires $200,000 in capital. The company decides to use debt financing to maintain control of its current stockholders. If the company takes on a loan of $150,000 to finance the project, how much additional capital can be allocated from retained earnings?
a)
$50,000
b)
$150,000
c)
$200,000
d)
$500,000
94.
A small company has $400,000 in retained earnings and wants to finance a new investment project. The project requires $250,000 in capital. The company decides to use debt financing to maintain control of its current stockholders. If the company takes on a loan of $150,000 to finance the project, how much capital does the new investment project require?
a)
$100,000
b)
$130,000
c)
$210,000
d)
$360,000
95.
Which of the following decisions is NOT considered a major part of financial management?
a)
Production decision
b)
Financing decision
c)
Investment decision
d)
Dividend decision
96.
What is the straight-line method?
a)
It is one of the simplest and easy-to-follow forecasting methods, that a financial analyst uses historical figures and trends to predict future revenue growth
b)
It is a smoothing technique that looks at the underlying pattern of a set of data to establish an estimate of future values, for example, the most common types are the 3-month and 5-month moving averages
c)
It is a regression model that estimates the relationship between one independent variable and one dependent variable using a straight line
d)
It is used to forecast revenues when two or more independent variables are required for a projection.
97.
What is moving average method?
a)
A smoothing technique that looks at the underlying pattern of a set of data to establish an estimate of future values.
b)
A regression model that estimates the relationship between one independent variable and one dependent variable using a straight line
c)
A method used to forecast revenues when two or more independent variables are required for a projection
d)
One of the simplest and easy-to-follow forecasting methods, which a financial analyst uses historical figures and trends to predict future revenue growth
98.
What is simple linear regression?
a)
A regression model estimating the relationship between one independent variable and one dependent variable using a straight line
b)
A method that is used to forecast revenues when two or more independent variables are required for a projection
c)
One of the simplest and easy-to-follow forecasting methods which a financial analyst uses historical figures and trends to predict future revenue growth
d)
A smoothing technique that looks at the underlying pattern of a set of data to establish an estimate of future values, for example, the 3-month moving averages.
99.
What is multiple linear regression?
a)
A method used to forecast revenues when two or more independent variables are required for a projection
b)
One of simple and easy-to-follow forecasting methods. A financial analyst uses historical figures and trends to predict future revenue growth
c)
A smoothing technique that looks at the underlying pattern of a set of data to establish an estimate of future values, for example, 5-month moving averages.
d)
It is a regression model that estimates the relationship between one dependent variable and one independent variable using a straight line
100.
A firm has forecasted sales of $3,000 in April, $4,500 in May, and $6,500 in June. All sales are on credit. 30% is collected the month of sale and the remainder the following month. What will be the balance in accounts receivable at the end of June?
a)
$4,550
b)
$6,500
c)
$1,950
d)
$5,100
101.
Describe the percent-of-sales method of financial forecasting.
a)
It assumes that balance sheet accounts maintain a constant relationship to sales
b)
It requires more time than a cash budget approach
c)
It is more detailed than a cash budget approach
d)
It provides a month-to-month breakdown of data
102.
Find the statement that is true in the case of the percent-of-sales method.
a)
As the dividend payout ratio goes up, the required new funds also rise
b)
As the dividend payout ratio rises, required new funds decline
c)
The dividend payout ratio does not affect new funds
d)
A change to the ex-dividend date causes the required new funds to change
103.
When using the percent-of-sales method in forecasting funds needed, which of the following is not true?
a)
Required new funds increase as accumulated amortization increases
b)
Required new funds decrease as profit margins increase
c)
As the dividend payout ratio decreases, the required new funds also decrease
d)
As the tax rate increases, the required new funds increase
104.
In forecasting a firm's cash needs for a future period:
a)
a cash budget approach can deal effectively with both level and seasonal production schedules
b)
cash budgets are less exact than the percent-of-sales method
c)
a cash budget approach cannot deal effectively with both level and seasonal production schedules
d)
the percent-of-sales method is a detailed approach
105.
What is a business risk?
a)
Risk which is related to future earnings of a company
b)
Risks that may derive from the bad work of workers
c)
Risks that may come from fixed costs only
d)
Risks that may come from variable costs only
106.
What are operating risks?
a)
Risks that may derive from the fixed costs and variable costs that the firm incurs in order to operate
b)
Risk which is related to future earnings of a firm
c)
Risks from both fixed and variable finance costs that come from firm's capital structure
d)
Risks which may come from both economic instability of the country that the firm is operating in and the changes in preferences of people
107.
Which of the following are variable costs?
a)
Direct labour cost, direct cost of materials, costs for electricity associated with the production
b)
Direct labour cost, payment for the rent of warehouse, costs for electricity associated with the production
c)
Salary for the Director of the firm, direct material cost, payment for the rent of warehouse
d)
Direct labour cost, direct cost of materials, cost from paying for patents
108.
If a firm's total fixed cost is $3000, the variable cost per product is $10 and the price of a product is $20, find the break-even quantity.
a)
300
b)
100
c)
200
d)
150
109.
What are semivariable costs?
a)
Costs that are fixed for a while and then rise sharply to a higher level as a higher outcome reached, remain fixed then rise again
b)
Costs that do not vary in total amount as quantity of output changes
c)
Costs that vary in total as output changes
d)
The total amount of the enterprise's expenses on paying wages to workers
110.
What is financial leverage?
a)
Results from the firm's use of sources of financing that require a fixed rate of return
b)
Results from operating costs that are fixed and do not vary with the level of firm sales
c)
The result of the combined effects of both operating and capital leverage
d)
The total amount of the enterprise's expenses on paying wages to financial managers
111.
What is optimal capital structure?
a)
The capital structure that minimizes the firm's composite cost of capital (maximizes the common stock price) for raising a given amount of funds
b)
The mix of interest bearing short- and long-term debt plus equity funds used by the firm
c)
The mix of all sources of funding that appears on the right-hand side of the balance sheet
d)
The range of debt use in the firm's capital structure that yields the lowest overall cost of capital for the firm
112.
If a firm's total fixed cost is $3000, the break-even quantity is 300, and the price of a product is $20, find the variable cost per product.
a)
$10
b)
$15
c)
$20
d)
$5
113.
What type of enterprise assets does the enterprise's cash belong to?
a)
Liquid asset
b)
Non-current asset
c)
Direct costs
d)
Indirect costs
114.
What do firms use cash inflow to measure for?
a)
Financial health of business
b)
Dividends
c)
Sale of products
d)
Sale of assets
115.
What is money available for a business to pay for day-to-day operation?
a)
Working capital
b)
Net cash flow
c)
Free cash flow
d)
Financial reporting
116.
Which cash flow is not required for operations or reinvestment?
a)
It is free cash flow
b)
It is net cash flow
c)
It is overall cash flow
d)
It is incremental cash flow
117.
What is the initial outlay?
a)
It is the immediate cash outflow necessary to purchase the asset and put it in operating order
b)
It is the net cash flow from all cash inflows and outflows over a specific time and between two or more business choices
c)
It is a cash flow not required for operations or reinvestment
d)
It is all the money going out of business
118.
Which option in capital-budgeting is common when the firm has exclusive rights, perhaps a patent, to a product or technology?
a)
Option to delay
b)
Option to expand
c)
Option to abandon
d)
Option to claim
119.
Which measure of risk ignores diversification within the firm and within shareholder's portfolio?
a)
Project-standing-alone risk
b)
Contribution-to-firm risk
c)
Systematic risk
d)
Inflation risk
120.
What is international finance?
a)
Sometimes known as international macroeconomics, it is the study of monetary interactions between two or more countries, focusing on areas such as foreign direct investment and currency exchange rates
b)
Financial markets that bring buyers and sellers together to trade stocks, bonds, currencies, and other financial assets
c)
It refers to the money borrowed from lenders or investors by a company or organization
d)
It is the range of debt use in the firm's capital structure that yields the lowest overall cost of capital for the firm
121.
What is international business and international finance?
a)
The international business and international finance provide an in-depth understanding of the relationships between general management and finance in an international setting
b)
International finance deals with the management of finances in a global business.
c)
International companies export goods and services around the world
d)
The International Monetary Fund, or IMF, works to establish growth and prosperity for all of its member countries
122.
What is the role of international finance?
a)
International finance focuses on managing financial transactions, exchange rates, and investment decisions across different countries
b)
International finance is only concerned with the stock market and domestic financial institutions
c)
International finance only deals with foreign direct investment (FDI) and does not involve currency exchange or trade financing
d)
International finance has no impact on multinational corporations or global economic stability
123.
What is the role of international business?
a)
International business involves trade, investment, and business operations across national borders, helping companies expand into global markets
b)
International business is only about exporting goods and does not include services or foreign investments
c)
International business only applies to large multinational corporations, not small or medium-sized enterprises (SMEs)
d)
International business has no impact on economic growth or global trade
124.
What is the main difference between international and domestic banks?
a)
International banks can arrange trade financing, foreign exchange transactions, and can assist their clients in hedging exchange rate risk
b)
International banks can operate in multiple countries, while domestic banks can only operate in one country
c)
International banks can lend and borrow in any currency, while domestic banks can only lend and borrow in their own currency
d)
International banks can underwrite securities, while domestic banks can only issue deposits
125.
What is a foreign direct investment (FDI)?
a)
An investment made by a foreign entity in another country's physical assets
b)
An investment made by a foreign entity in another country's financial assets
c)
An investment made by a domestic entity in another country's financial assets
d)
An investment made by a domestic entity in another country's physical assets
126.
What is the type of international business transaction that involves contractual agreements that permit foreign firms to utilize services, products and processes from different countries?
a)
Licensing and franchising
b)
Foreign direct investment
c)
Foreign portfolio investment
d)
Balance of payments
127.
What is internationalization?
a)
The process of tailoring a product, service or operational offering to facilitate growth into international markets
b)
Any money issued by a country other than the one in which you are operating. It’s used in international trade, investment, and finance.
c)
Statement that reports amount of cash collected and paid out by a company in operating, investing and financing activities for a period of time.
d)
Import and export
128.
What is the study of monetary interactions between two or more countries called?
a)
International finance
b)
International trade
c)
International business
d)
International economics
129.
Find the asset with a fixed rate of return.
a)
Bank deposit in Uzbek sums
b)
Bank deposit in US dollars
c)
Ordinary shares of a joint-stock company
d)
1000 Euros
130.
Select the statement you think to be correct.
a)
Risk is a probability of losses
b)
Risk is only a problem for rich people
c)
Risk is a problem only for the state
d)
Risk is not a problem. Gains and losses meet every day
131.
Select the statement you consider to be correct.
a)
Risk is a probability of both losses and possible positive outcomes
b)
Buying US dollars, you only win
c)
Buying euros, you only lose
d)
When opening a bank deposit in Uzbek sums, you are at great risk
132.
Select the statement you suggest to be correct.
a)
Risk is a probability of deviation of the actual result (fact) from the expected (planned) one
b)
Risk is only a problem for poor people
c)
Risk is only a problem for self-employed persons
d)
Risk is only a problem for businessmen
133.
Find example with a zero or insignificant financial risk
a)
To pay 6000 for 1 bottle of Coca-Cola
b)
To open a bank deposit in euros
c)
To buy 1200 euros
d)
To lend 1000000 Uzbek sums to a friend
134.
Find an example with a zero or insignificant financial risk
a)
To open a bank deposit in Uzbek sums
b)
To open a bank deposit in US dollars
c)
To buy 10000 Russian rubles
d)
To buy ordinary shares of a big factory
135.
Find one example with a zero or insignificant financial risk
a)
To buy bonds of a bank
b)
To buy ordinary shares of a bank
c)
To open a bank deposit in a foreign currency
d)
To buy 20000 Russian rubles
136.
Find one example with a zero financial risk
a)
To buy 10 US dollars to pay for the pdf-book on Google books
b)
To buy 1000 euros
c)
To buy 100 US dollars
d)
To open an own business
137.
Find one example with an insignificant financial risk
a)
To give 10000 Uzbek sums to your groupmate “till tomorrow”
b)
To give 1000000 Uzbek sums to your groupmate for one month
c)
To buy 900 euros
d)
To buy 1000 US dollars
138.
Find an example with a big financial risk
a)
To invest 1000 USD in a bank deposit in US dollars
b)
To pay 6000 UZS for 1 cup of coffee
c)
To invest 2 mln UZS in a bank deposit in Uzbek sums
d)
To buy bonds of a commercial bank
139.
Find an example with a big or huge financial risk
a)
To buy ordinary shares of a corporation
b)
To buy bonds of a corporation
c)
To work as an accountant in a corporation
d)
To buy goods produced by a corporation
140.
Find one example with a big or huge financial risk
a)
To give 500 euros to your friend for 1 year without any signed document
b)
To lend 20000 UZS to a friend
c)
To buy 5 US dollars to pay for the program on Google Play
d)
To invest 1 mln UZS in a bank deposit in Uzbek sums
141.
Find one example with a big financial risk
a)
To give 1000 euros to your friend for 1 year without any signed document
b)
To lend 3000 UZS to a friend
c)
To buy 10 US dollars to pay for the program on Google Play
d)
To pay for mobile services
142.
Find an example with a huge financial risk
a)
To invest 1000 US dollars in the small business entity of your school classmate
b)
To lend 10000 UZS to a friend
c)
To buy 6 US dollars to pay for the program on Google Play
d)
To pay for communal services
143.
Choose one financial instrument on which you cannot both get income and lose money. You can receive only income.
a)
A bank deposit in Uzbek sums
b)
A bank deposit in US dollars
c)
An ordinary share of an enterprise
d)
100 US dollars
144.
Choose a financial instrument on which you cannot both get income and lose money. You can receive only income.
a)
A privileged share of an enterprise
b)
Purchase of 100 US dollars
c)
Purchase of 1000 euros
d)
Your investment in your own enterprise
145.
If you plan to work as a financial manager of a joint stock company with the prospects of further promotion, then you need to know finance ...
a)
to ensure an interesting career
b)
to manage the state budget
c)
to save the family budget
d)
to get knowledge about the US pension system
146.
If you plan to become an individual entrepreneur and later to create your own company, then you need knowledge of finance ...
a)
to be successful in the business world
b)
to get knowledge in the field of financing state budget expenditures
c)
to ensure an interesting career for a commercial bank employee
d)
to manage the budget system of the Republic of Uzbekistan
147.
If you plan to successfully invest your money and become a co-owner of a small business, then you need knowledge of finance ...
a)
to be successful in the world of business
b)
to broaden horizons in the area of local budget expenditures
c)
to ensure a profitable career as a financial manager of a large corporation
d)
to help your grandmother to spend her pension
148.
If you work in a commercial bank and plan to take a higher position, then you need knowledge of finance ...
a)
to ensure a rewarding career
b)
to broaden the horizons in the field of public finance
c)
for successful work as a leader of a small business
d)
to study foreign experience in the field of social security
149.
If you plan to become a chief accountant of a large enterprise, then you need knowledge of finance …
a)
to ensure an excellent career
b)
for effective management of funds of a budgetary organization
c)
for successful activity in an insurance organization
d)
to expand horizons in the field of functioning of budgetary organizations
150.
If you plan to save money for the purchase of a personal car, then knowledge of finance is necessary for you …
a)
for effective management of personal money
b)
to ensure an interesting and profitable career as a financial manager of a commercial bank
c)
for successful activities in the field of public finance
d)
to expand horizons in the field of the state financial policy
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