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FIN 102 CBT PRACTICE

Ace/Undergragra 3 days ago

0 568 1 minute read

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

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

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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 measures the dispersion of cash flows of a project from its mean value?

A. Coefficient of variation

B. Payback period

C. Certainty Equivalent Method

D. Standard Deviation

2 / 40

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

A. Fixed Asset

B. Imaginary Asset

C. Intanginble Asset

D. Liquid Asset

3 / 40

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

A. The value of money is not affected by time

B. Money should only be invested for short periods

C. Money loses its value over time regardless of interest

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

4 / 40

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

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

B. It requires complex calculations and is difficult to understand

C. It does not consider the time value of money

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

5 / 40

5. Which of the following best describes speculation?

A. The practice of saving money in a bank account

B. A guaranteed method for achieving stable returns

C. A long-term investment strategy

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

6 / 40

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

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

B. Keeping money in a savings account without interest

C. Spending money on consumables

D. The purchase of luxury goods for personal enjoyment

7 / 40

7. What is an asset?

A. A resource that always generates cash flow immediately

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

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

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

8 / 40

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

A. Bonds

B. Stocks

C. Real Estate

D. Mutual Funds

9 / 40

9. 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

10 / 40

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

A. Stocks

B. Real Estate

C. Speculative Short-Selling

D. Government Bonds

11 / 40

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

A. Accumulating retirement funds

B. Spending all earnings

C. Buying daily groceries

D. Avoiding any form of financial planning

12 / 40

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

A. Unsystematic Risk

B. Business Risk

C. Liquidity Risk

D. Systematic Risk

13 / 40

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

A. Market intermediaries

B. Political stability

C. Financial markets

D. Assets and investment vehicles

14 / 40

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

A. Trade Barriers

B. Fixed Return on Investments

C. Customer needs

D. Technological Changes

15 / 40

15. 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. Bonds

B. Derivatives

C. Stocks

D. Certificate of Deposit (CD)

16 / 40

16. What is 'compound interest'?

A. Interest that decreases over time

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

C. Interest that does not accumulate over time

D. Interest paid only on the initial deposit

17 / 40

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

A. Accounting Rate of Return (ARR)

B. Net Present Value (NPV)

C. Payback Period Method

D. None of the options

18 / 40

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

A. Accumulating retirement funds

B. Enhancing current income

C. Immediate consumption of goods

D. Saving for major expenditures

19 / 40

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

A. Reject all projects regardless of PI

B. Accept projects with a PI less than 1

C. Accept projects with a PI equal to 1

D. Accept projects with a PI greater than 1

20 / 40

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

A. Higher risk always results in lower return

B. Risk and return are unrelated

C. Higher risk is directly associated with higher potential return

D. Lower risk results in higher return

21 / 40

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

A. Standard Deviation / Expected Value

B. Expected Value / Standard Deviation

C. Expected Value / (Standard Deviation)²

D. (Standard Deviation)² / Expected Value

22 / 40

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

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

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

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

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

23 / 40

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

A. Expected Net Present Value Method

B. Sensitivity Analysis Method

C. Standard Deviation Method

D. Payback Period Method

24 / 40

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

A. Provides a hedge against inflation

B. Dependent on financial market volatility

C. High liquidity

D. Low transaction costs

25 / 40

25. What is the key characteristic of unsystematic risk?

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

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

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

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

26 / 40

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

A. Gross Domestic Products(GDP)

B. Consumer Confidence

C. Interest Rates

D. Political Stability

27 / 40

27. 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

28 / 40

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

A. 1900-1950

B. 1980-date

C. 1880-1952

D. 1952-1980

29 / 40

29. How is risk different from probability?

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

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

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

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

30 / 40

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

A. Arbitrage

B. Blank Transfer

C. Margin Trading

D. Cornering

31 / 40

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

A. The level of risk involved in an investment

B. The ease of converting an investment to cash

C. The amount of profit an investment makes

D. The potential for capital appreciation

32 / 40

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

A. Risk-Adjusted Discount Rate Method

B. Sensitivity Analysis Method

C. Certainty Equivalent Method

D. Expected Net Present Value Method

33 / 40

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

A. Volatility Risk

B. Interest Rate Risk

C. Business Risk

D. Inflation Risk

34 / 40

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

A. A speculator who holds long-term investments

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

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

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

35 / 40

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

A. 0.50

B. 1.00

C. 0.25

D. 0.75

36 / 40

36. What is risk in a business context?

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

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

C. The chance of achieving profits above target levels.

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

37 / 40

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

A. The security of the capital invested

B. The popularity of the investment among friends

C. The color of the investment certificate

D. The length of the investment name

38 / 40

38. Which of the following best describes probability?

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

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

C. The estimation of potential losses in an investment.

D. The degree of uncertainty in a financial decision.

39 / 40

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

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

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

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

D. The guaranteed profitability of an investment.

40 / 40

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

A. Fiscal Policy

B. Exchange rates

C. Aging Population

D. Technological Innovation

Your score is

The average score is 64%

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Ace/Undergragra 3 days ago

0 568 1 minute read

FIN 102 CBT PRACTICE

Ace/Undergragra

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