FUOYE FIN 102 CBT Practice : Undergragra

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Take your time to read instructions before taking this test.

There are 40 questions which you are to answer in 15 minutes that gives you roughly 30 seconds per question.

If you can get at least 60%, you can be rest assured that you’ll ace FIN 102 exam

In a normal exam you will be asked between 40 – 60 questions but I only arranged 40 questions

Note

Do not be in a hurry to answer the questions
Do not waste time on a question you don’t know
Move as fast as possible and starting with questions that don’t have calculation first to save time
Always crosscheck
Don’t be in a hurry to submit, you are not in a competition
Don’t be scared. Getting an A is easy
Don’t be over confident, you can end up a D, E or F. Calm your blood, no be only you sabi book
Please do well to use our comment box incase there’s a message you want to pass to us

70 – 100 A

60 – 69 B

50 – 59 C

45 – 49 D

40 – 44 E

0 – 39 F

I wish you success

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FIN 102

1 / 40

1. Which of the following is NOT a type of asset?

A. Liquid Asset

B. Intanginble Asset

C. Imaginary Asset

D. Fixed Asset

2 / 40

2. Which of the following is an advantage of investing in real assets?

A. Provides a hedge against inflation

B. Low transaction costs

C. High liquidity

D. Dependent on financial market volatility

3 / 40

3. Which method converts uncertain cash flows to certainty-equivalent cash flows using an estimated certainty equivalent coefficient?

A. Sensitivity Analysis Method

B. Expected Net Present Value Method

C. Certainty Equivalent Method

D. Risk-Adjusted Discount Rate Method

4 / 40

4. What distinguishes real assets from financial assets?

A. Real assets are always more liquid than financial assets

B. Real assets do not include natural resources

C. Real assets are intangible, while financial assets are tangible

D. Real assets have intrinsic value, while financial assets derive their value from a contractual claim

5 / 40

5. Which of the following best describes speculation?

A. A long-term investment strategy

B. A short-term, high-risk financial transaction with potential for substantial gain

C. A guaranteed method for achieving stable returns

D. The practice of saving money in a bank account

6 / 40

6. What is an asset?

A. A resource that decreases expenses but does not generate cash flow

B. A resource that always generates cash flow immediately

C. A resource with no economic value that an individual or corporation controls

D. A resource with economic value that an individual, corporation, or country owns or controls with the expectation of providing a future benefit

7 / 40

7. Which method involves calculating the time it takes to recoup the initial capital invested in a project?

A. Expected Net Present Value Method

B. Payback Period Method

C. Standard Deviation Method

D. Sensitivity Analysis Method

8 / 40

8. Which type of risk is inherent in an economy and common to all industries, and cannot be eliminated by diversification?

A. Unsystematic Risk

B. Liquidity Risk

C. Business Risk

D. Systematic Risk

9 / 40

9. What does 'liquidity' refer to in investment terms?

A. The ease of converting an investment to cash

B. The amount of profit an investment makes

C. The level of risk involved in an investment

D. The potential for capital appreciation

10 / 40

10. What is 'compound interest'?

A. Interest that does not accumulate over time

B. Interest paid only on the initial deposit

C. Interest that decreases over time

D. Interest paid on the initial deposit and any accumulated interest from previous periods

11 / 40

11. What is the primary definition of investment according to Wikipedia?

A. Keeping money in a savings account without interest

B. The dedication of money to purchase an asset to attain an increase in value over time

C. Spending money on consumables

D. The purchase of luxury goods for personal enjoyment

12 / 40

12. Which of the following is NOT a cause of uncertainty in a business environment?

A. Technological Changes

B. Fixed Return on Investments

C. Trade Barriers

D. Customer needs

13 / 40

13. Which of the following is NOT considered an element of the investment environment?

A. Assets and investment vehicles

B. Market intermediaries

C. Political stability

D. Financial markets

14 / 40

14. What is an example of a social factor that can influence investment opportunities?

A. Exchange rates

B. Technological Innovation

C. Fiscal Policy

D. Aging Population

15 / 40

15. What is the probability that a fair coin will come up heads in a single toss

A. 0.75

B. 0.25

C. 0.50

D. 1.00

16 / 40

16. Which type of speculative transaction involves earning profit from price differences of a security in two different markets?

A. Blank Transfer

B. Cornering

C. Arbitrage

D. Margin Trading

17 / 40

17. Which of the following is NOT an economic factor affecting investment?

A. Interest Rates

B. Consumer Confidence

C. Gross Domestic Products(GDP)

D. Political Stability

18 / 40

18. Who is a 'Bear' in the context of speculators?

A. A speculator who anticipates a rise in the price of securities

B. A speculator who anticipates a fall in the price of securities

C. A speculator who holds long-term investments

D. A speculator who applies for new shares to sell at a premium

19 / 40

19. Which of the following is NOT a type of investment?

A. Real Estate

B. Government Bonds

C. Stocks

D. Speculative Short-Selling

20 / 40

20. What does the 'time value of money' imply?

A. The value of money is not affected by time

B. Money can earn interest over time, increasing its future value

C. Money should only be invested for short periods

D. Money loses its value over time regardless of interest

21 / 40

21. How is risk different from probability?

A. Risk is a measure of certainty, while probability is a measure of uncertainty.

B. Risk measures the likelihood of an event, while probability measures potential loss.

C. Risk measures potential loss, while probability measures the likelihood of an event.

D. Risk is always expressed as a number between zero and one, while probability is not.

22 / 40

22. Which type of financial asset involves a legal document that states the money lent, the amount to be paid back plus interest, and the bond’s maturity date?

A. Stocks

B. Bonds

C. Certificate of Deposit (CD)

D. Derivatives

23 / 40

23. Which of the following best describes probability?

A. The measure of the likelihood that a particular event will occur.

B. The degree of uncertainty in a financial decision.

C. The estimation of potential losses in an investment.

D. The degree of certainty that an event will occur.

24 / 40

24. Which of the following factors should be considered before investing?

A. The popularity of the investment among friends

B. The color of the investment certificate

C. The length of the investment name

D. The security of the capital invested

25 / 40

25. What is one of the primary disadvantages of speculation?

A. It minimizes the risk of price fluctuations

B. It guarantees high returns

C. It can lead to market manipulation and artificial price changes

D. It ensures steady income

26 / 40

26. What is the decision rule for the Profitability Index (PI)?

A. Accept projects with a PI equal to 1

B. Accept projects with a PI less than 1

C. Reject all projects regardless of PI

D. Accept projects with a PI greater than 1

27 / 40

27. Which type of investment represents ownership in a company?

A. Real Estate

B. Bonds

C. Mutual Funds

D. Stocks

28 / 40

28. What is the key characteristic of unsystematic risk?

A. It affects the entire economy and cannot be controlled.

B. It is insurable and can be reduced by means of portfolio diversification.

C. It is common to all industries and cannot be reduced.

D. It includes risks such as exchange and interest rates.

29 / 40

29. Which of the following is NOT a limitation of the Payback Period Method?

A. It requires complex calculations and is difficult to understand

B. It does not consider the time value of money

C. It gives equal weight to returns of equal amounts even if they occur in different time periods

D. It fails to measure the profitability of an investment project as it does not consider all the cash inflows after the payback period

30 / 40

30. Which of the following methods considers the time value of money?

A. Accounting Rate of Return (ARR)

B. Net Present Value (NPV)

C. None of the options

D. Payback Period Method

31 / 40

31. Which of the following is NOT a common investment goal?

A. Accumulating retirement funds

B. Saving for major expenditures

C. Enhancing current income

D. Immediate consumption of goods

32 / 40

32. Which type of risk refers to the potential loss of value in a bond due to changes in interest rates?

A. Business Risk

B. Interest Rate Risk

C. Volatility Risk

D. Inflation Risk

33 / 40

33. Which of the following measures the dispersion of cash flows of a project from its mean value?

A. Standard Deviation

B. Coefficient of variation

C. Certainty Equivalent Method

D. Payback period

34 / 40

34. What is the relationship between risk and return in investments?

A. Higher risk is directly associated with higher potential return

B. Risk and return are unrelated

C. Lower risk results in higher return

D. Higher risk always results in lower return

35 / 40

35. In the evolution of investment analysis and management, which period is known as the Pre-scientific Era?

A. 1952-1980

B. 1880-1952

C. 1980-date

D. 1900-1950

36 / 40

36. Which of the following statements is true regarding probability?

A. The closer the probability is to zero, the more likely the event will occur.

B. The closer the probability is to one, the less likely the event will occur.

C. Probability is always expressed as a number between zero and one.

D. Probability can only be expressed as a whole number.

37 / 40

37. Which of the following best defines risk in a financial context?

A. The guaranteed profitability of an investment.

B. The chance that an outcome or investment's actual gains will match the expected outcome.

C. The variation in the outcomes that could occur over a specified period.

D. The certainty of receiving a fixed return on an investment.

38 / 40

38. Which of the following is a common investment goal?

A. Avoiding any form of financial planning

B. Accumulating retirement funds

C. Spending all earnings

D. Buying daily groceries

39 / 40

39. What is the formula for the Coefficient of Variation?

A. Expected Value / Standard Deviation

B. Standard Deviation / Expected Value

C. Expected Value / (Standard Deviation)²

D. (Standard Deviation)² / Expected Value

40 / 40

40. What is risk in a business context?

A. The certainty of generating high profits in the long term.

B. The chance of achieving profits above target levels.

C. Anything that threatens an organization's ability to generate profits at target levels.

D. The likelihood of a business achieving all its targets.

Your score is

The average score is 60%

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