Question 1

 

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A ____________is one financial intermediary handling individual saving. It receives premium payments that are placed in loans or investment to accumulate funds to cover future benefits.

a.saving banks

 

 

b.Union bank

 

 

c.Life insurance company

 

 

d.Commercial bank

 

 

Question 2

 

 

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A _____________ is set up so that employees of corporations or government can receive income after retirement

a.Life insurance company

 

 

b.Pension fund

 

 

c.savings bank

 

 

d.credit union

 

 

 

Question 3

 

 

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At the regional level, this system is highly responsible for the flow of money from the creditor to the debtor

a.Economic system

 

 

b.technological system

 

 

c.Financial system

 

 

d.socio-cultural system

 

 

 

 

 

 

 

Question 4

 

 

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A___________ is a type of financial intermediary that pools savings of individuals and makes them available to business and government users. Funds are obtained through the sale of shares.

a.credit union

 

 

b.Savings and loans

 

 

c.Mutual fund

 

 

d.saving bank

 

 

 

 

 

 

Question 5

 

 

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By definition, the money market involves the buying and selling of ______________

a.Flows of funds

 

 

b.Stock and bonds

 

 

c.Short-term funds

 

 

d.Funds that mature in more than one year

 

 

 

 

 

 

 

Question 6

 

 

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Government usually_____

a.Borrows funds directly form financial institutions

 

 

b.Is a net demander of funds

 

 

c.Is a net supplier of funds

 

 

d.Maintains permanent deposits with financial institutions

 

 

 

 

 

 

Question 7

 

 

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It is a set of institutions or organizations that primarily provide depository and safeguard functions, including providing of loan or credit to borrowers.

a.Financial statements

 

 

b.Financial institutions

 

 

c.financial instruments

 

 

d.financial markets

 

 

 

 

 

 

 

Question 8

 

 

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Most business raise money by selling their securities in a.

a.A stock exchange

 

 

b.a private placement

 

 

c.a public offering

 

 

d.A direct placement

 

 

 

 

 

 

Question 9

 

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The basic elements of the financial system at the regional level are the following except:

a.Financial institutions

 

 

b.financial instruments

 

 

c.financial statements

 

 

d.financial markets

 

 

 

 

 

 

Question 10

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The following factors are forces of the societal environment affecting the business except:

a.Legal system

 

 

b.Technological system

 

 

c.socio-cultural system

 

 

d.operating system

 

 

 

 

 

 

Question 11

 

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The key participants in financial transactions are individuals, businesses, and government. Individuals are net ________ of funds, and businesses are net ______ of funds.

a.Purchase; sellers

 

 

b.users; providers

 

 

c.Suppliers; users

 

 

d.users; suppliers

 

 

 

 

 

 

Question 12

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The _________ is created by financial relationship between suppliers and users of short-term funds.

a.Money market

 

 

b.Financial market

 

 

c.capital market

 

 

d.stock market

 

 

 

 

 

 

Question 13

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Which of the following is not a financial institution?

a.a commercial bank

 

 

b.A pension fund

 

 

c.A newspaper publisher

 

 

d.an insurance company

 

 

 

 

 

 

 

Question 14

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Which of the following is not a service provided by financial institutions

a.Buying the business of customers

 

 

b.Lending money to customers

 

 

c.Investing customers' saving in stock and bonds

 

 

d.Paying savers' interest on deposited funds

 

 

 

 

 

 

Question 15

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Which of the following is not considered a major category of financial institutions?

a.Financial intermediary

 

 

b.financial instruments

 

 

c.Depository institutions

 

 

d.investment institutions

 

 

 

 

 

 

Question 16

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Capital market is specialized branch of business finance involved in the study of financial institutions and their functions.

Select one:

True

False

 

 

 

Question 17

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Finance connotes money.

Select one:

True

False

 

 

 

Question 18

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Finance is static.

Select one:

True

False

 

 

 

Question 19

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Financial investment, as an area of finance, is directed towards the evaluation and study of financial institutions and their functions in a financial community.

Select one:

True

False

 

 

 

Question 20

 

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Financial management is primarily focused on the allocation of public resources.

Select one:

True

False

 

 

 

Question 21

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In large companies, the head of the finance division is designated as the chief finance officer.

Select one:

True

False

 

 

 

Question 22

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The accountant can likewise perform the functions of the treasurer in a business organization.

Select one:

True

False

 

 

 

Question 23

 

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The operating decisions of the finance officer is related to the day-to-day activities of the business.

Select one:

True

False

 

 

 

Question 24

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The Philippine government agency primarily involved in the exercise of finance functions is the Department of Budget and Management.

Select one:

True

False

 

 

 

Question 25

 

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The term finance has a standard definition that is universally recognized and accepted.

Select one:

True

False

Answer 1. c.Life insurance company
 

Answer 2. b.Pension fund
 

Answer 3. c.Financial system
 

Answer 4. c.Mutual fund
 

Answer 5. c. Short term funds.
 

Answer 6. b.Is a net demander of funds
 

Answer 7. b.Financial institutions
 

Answer 8. c.a public offering
 

Answer 9. c.financial statements
 

Answer 10. d.operating system
 

Answer 11. c.Suppliers; users
 

Answer 12. a.Money market
 

Answer 13. c.A newspaper publisher
 

Answer 14. a.Buying the business of customers
 

Answer 15. b.financial instruments
 

Answer 16. True
 

Answer 17. False
 

Answer 18. False

 

Answer 19. False
 

Answer 20. False
 

Answer 21. True
 

Answer 22. False
 

Answer 23.True
 

Answer 24.False
 

Answer 25.True

 

Step-by-step explanation

Answer 1. c.Life insurance company
Life insurance is a contract between a current insurance owner and an insurance agency in which the insurer agrees to pay an amount of money in exchange for a premium if the covered person dies or if a certain length of time passes. In exchange for the policyholder's lifetime insurance premiums, a life insurance policy guarantees that the insurer will pay a sum of money to chosen heirs when the policyholder dies.

 

Answer 2. b.Pension fund
Any plan, fund, or programme that provides retirement income is referred to as a pension fund, also called as a superannuation fund in certain countries. Pension funds, which often have huge sums of money to invest, are key shareholders in both public and private firms. Companies are usually in charge of managing pension funds (employers). A pension fund's principal goal is to ensure that there will be enough income to support employees' pensions once they retire in the future.

 

Answer 3. c.Financial system
A financial system is a regional economic framework in which financial firms assist lenders, borrowers, and investors in the movement of funds and assets. Its goal is to optimally distribute economic resources in order to promote economic growth and give a return on investment (ROI) for market participants.

 

Answer 4. c.Mutual fund
A mutual fund is a business that collects money from several investors and invests it in equities, corporate bonds, and short-term loans. The mutual fund's portfolio includes all of its holdings. Mutual funds are used by investors. A mutual fund is an investment managed investment vehicle that collects money from a number of individuals to buy securities.

 

Answer 5. c. Short term funds.
The money market is an organised exchange market in which participants can borrow and lend short-term, high-quality debt instruments with average maturities of one year or less. It enables governments, companies, and other major entities to sell short-term assets.

 

Answer 6. b.Is a net demander of funds
Governments keep deposits in commercial banks for temporarily idle cash, some tax bills, and Social Security payments. They do not borrow cash directly from banking firms, but they do borrow indirectly from them by selling debt instruments to other institutions. The government, like businesses, is often a net borrower. In general, it borrows more than it saves.

 

Answer 7. b.Financial institutions
A financial institution is a firm that deals with financial and monetary activities including savings, mortgages, securities, and currency exchange. Customers' deposits and investments are handled by these institutions.

 

Answer 8. c.a public offering
A public offering is the selling to the general public of equity capital or other financial products such as bonds in order to raise funds. The funds obtained might be used to address operating gaps, support corporate development, or create sensible investments.

 

Answer 9. c.financial statements
A financial system facilitates the flow of funds between investors and borrowers. At the global, regional, and organisational levels, a financial system can be defined. The five essential components of the financial system are financial companies, financial markets, financial instruments, financial services, and money.

 

Answer 10. d.operating system
The social environment encompasses all external variables that do not directly affect the organization's short-term operations but can, and frequently do, impact long-term decisions. Economic causes, technological drives, changes in government policy or laws, political factions, and sociocultural influences are all examples of these forces.

 

Answer 11. c.Suppliers; users
Individuals, corporations, and governments are the main participants in financial transactions. These parties are both fund suppliers and fund demanders. Individuals are net providers, meaning they save more money than they borrow, but businesses and governments are net demanders, owing to the fact that they borrow more money than they save. Individuals, it may be argued, contribute the additional cash that corporations and governments demand.

 

Answer 12. a.Money market
Money Markets are stock exchanges where short-term financial assets with the liquidity of one year or less are exchanged. The securities, sometimes known as trading bills, are extremely liquid. These also make it easier for participants to meet their short-term borrowing needs by allowing them to trade bills. Banks, huge investment firms, and individual investors are typically players in this financial sector.

 

Answer 13. c.A newspaper publisher
Financial institutions are companies that offer a variety of financial services to their clients. They take the money that consumers give them and distribute it to people and companies who need it. As a result, they connect savers and spenders to make financial transactions easier. A newspaper publisher is not a financial institution. 

 

Answer 14. a.Buying the business of customers
Currently, the majority of major banks provide both demographics bank deposits, lending, and basic financial advising. Savings and checking accounts, CDs, personal and home loans, credit cards, and corporate banking accounts are all available at retail and commercial banks. Buying customers' business is not the service provided by financial institutions.

 

Answer 15. b.financial instruments
The financial instrument is the financial asset but not the category of the financial institutions. Central banks, commercial and retail banks, online banks, credit unions, savings and loans organisations, investment banks, investment businesses, brokerages, insurance firms, and mortgage companies are the primary types of financial institutions.

 

Answer 16. True
A capital market is a location where buyers and sellers trade government bonds, securities, and other financial instruments. Trading involves both individuals and organisations. Long-term securities are the primary focus of the capital market. Fresh shares are issued and sold in primary capital markets. In the secondary market, investors exchange previously issued assets. The capital market is a branch of corporate finance that investigates the various financial organisations and their activities in assisting both individual and government borrowers of cash. It also involves an examination of the costs of borrowing cash, such as interest and other financial motives.

 

Answer 17. False
Finance is important to the achievement of every type of organisation. As a result, it's referred to as a company's "lifeblood." "Finance" refers to the management of money. Finance is described as the art and discipline of financial planning.

 

Answer 18. False

Managers must no longer have to wait for weekly or monthly financial statements to analyse firm productivity; instead, they must act quickly. Despite this, many companies continue to send out static income reports to a certain set of individuals. If a stakeholder has any concerns about the statistics, it might be difficult to get further data from a static presentation since the solutions are generally hidden in the data that supports the numbers. Furthermore, a static analysis only represents the company's state at the time of its creation. As a result, even static report data has little value for planning and decision-making.

 

Answer 19. False
A financial investment is a purchase into which you put money in the belief that it will grow or develop into a bigger quantity of money. The idea is that you may eventually sell it for a greater price or generate money while you hold it. There are assets that are supposed to provide money and help the firm appreciate or expand.

 

Answer 20. False
Financial management entails the effective administration of corporate resources, particularly those of a financial character. The primary goal of the manager is to maximize profit in both the short and long run. It even involves wealth maximisation, in which the value or hold over profits of each shareholder should rise.

 

Answer 21. True
The CFO is a financial manager who is in charge of working capital, financial planning, and taxation. A CFO is frequently the top financial position and the third-highest post in a corporation, and they play an important part in the firm's strategic ambitions.

 

Answer 22. False

The treasurer controls the financial department while the controller is in control of the accounting department. Controllers are often referred to be vice presidents of finance in some corporations. Their primary role is to assist their firm in growing its funds and carefully investing the money it has. The treasurer is the individual in charge of assisting the company's revenue growth. He or she establishes and maintains contacts with banks and financial firms so that they understand where to invest the company's funds.
 

Answer 23.True
Operating decisions are financial decisions that influence a company's day-to-day operations. It is aimed at delivering an instant response to the issues of the firm's functional sectors such as production, marketing, buying, and so on.

 

Answer 24.False
The Department of Finance is the executive branch of the Philippine government in charge of the formulation, institutionalisation, and administration of fiscal policies, the management of the government's financial resources, the supervision of all local government revenue operations, the review, approval, and management of all public debt, and the rationalisation, privatisation, and government oversight of corporate entities and assets owned, controlled, or controlled by the government.

 

Answer 25.True

Finance is described as the management of cash, which encompasses activities such as trade, borrowing, lending, budgeting, saving, and predicting. Financing is the process of obtaining finances to support a company's operations, acquisitions, or investments. Financial institutions make money accessible to businesses, customers, and shareholders to help them achieve their objectives.