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

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FIN 102

1 / 40

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

A. Certainty Equivalent Method

B. Expected Net Present Value Method

C. Sensitivity Analysis Method

D. Risk-Adjusted Discount Rate Method

2 / 40

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

A. Payback period

B. Coefficient of variation

C. Standard Deviation

D. Certainty Equivalent Method

3 / 40

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

A. 0.75

B. 0.50

C. 1.00

D. 0.25

4 / 40

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

A. Buying daily groceries

B. Accumulating retirement funds

C. Avoiding any form of financial planning

D. Spending all earnings

5 / 40

5. 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

6 / 40

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

A. Mutual Funds

B. Stocks

C. Bonds

D. Real Estate

7 / 40

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

A. The level of risk involved in an investment

B. The potential for capital appreciation

C. The ease of converting an investment to cash

D. The amount of profit an investment makes

8 / 40

8. What distinguishes real assets from financial assets?

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

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

C. Real assets do not include natural resources

D. Real assets are always more liquid than financial assets

9 / 40

9. 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

10 / 40

10. 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 applies for new shares to sell at a premium

D. A speculator who holds long-term investments

11 / 40

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

A. Higher risk always results in lower return

B. Lower risk results in higher return

C. Risk and return are unrelated

D. Higher risk is directly associated with higher potential return

12 / 40

12. Which of the following best describes speculation?

A. A guaranteed method for achieving stable returns

B. The practice of saving money in a bank account

C. A long-term investment strategy

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

13 / 40

13. 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. Certificate of Deposit (CD)

C. Derivatives

D. Bonds

14 / 40

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

A. High liquidity

B. Dependent on financial market volatility

C. Provides a hedge against inflation

D. Low transaction costs

15 / 40

15. What is 'compound interest'?

A. Interest that does not accumulate over time

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

C. Interest paid only on the initial deposit

D. Interest that decreases over time

16 / 40

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

A. Technological Innovation

B. Fiscal Policy

C. Exchange rates

D. Aging Population

17 / 40

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

A. The color of the investment certificate

B. The length of the investment name

C. The security of the capital invested

D. The popularity of the investment among friends

18 / 40

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

A. Liquid Asset

B. Imaginary Asset

C. Fixed Asset

D. Intanginble Asset

19 / 40

19. 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 zero, the more likely the event will occur.

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

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

20 / 40

20. What is the key characteristic of unsystematic risk?

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

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

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

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

21 / 40

21. 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

22 / 40

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

A. The value of money is not affected by time

B. Money loses its value over time regardless of interest

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

D. Money should only be invested for short periods

23 / 40

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

A. Trade Barriers

B. Customer needs

C. Fixed Return on Investments

D. Technological Changes

24 / 40

24. 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.

25 / 40

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

A. Accumulating retirement funds

B. Immediate consumption of goods

C. Enhancing current income

D. Saving for major expenditures

26 / 40

26. What is risk in a business context?

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

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

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

D. The chance of achieving profits above target levels.

27 / 40

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

A. (Standard Deviation)² / Expected Value

B. Standard Deviation / Expected Value

C. Expected Value / Standard Deviation

D. Expected Value / (Standard Deviation)²

28 / 40

28. What is an asset?

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

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 always generates cash flow immediately

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

29 / 40

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

A. It minimizes the risk of price fluctuations

B. It ensures steady income

C. It guarantees high returns

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

30 / 40

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

D. It does not consider the time value of money

31 / 40

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

A. Stocks

B. Speculative Short-Selling

C. Real Estate

D. Government Bonds

32 / 40

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

A. The purchase of luxury goods for personal enjoyment

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

C. Spending money on consumables

D. Keeping money in a savings account without interest

33 / 40

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

A. Cornering

B. Blank Transfer

C. Arbitrage

D. Margin Trading

34 / 40

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

A. Market intermediaries

B. Financial markets

C. Assets and investment vehicles

D. Political stability

35 / 40

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

A. Liquidity Risk

B. Systematic Risk

C. Business Risk

D. Unsystematic Risk

36 / 40

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

A. 1880-1952

B. 1952-1980

C. 1980-date

D. 1900-1950

37 / 40

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

A. Reject all projects regardless of PI

B. Accept projects with a PI greater than 1

C. Accept projects with a PI less than 1

D. Accept projects with a PI equal to 1

38 / 40

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

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

B. The guaranteed profitability of an investment.

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

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

39 / 40

39. Which of the following best describes probability?

A. The degree of uncertainty in a financial decision.

B. The estimation of potential losses in an investment.

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

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

40 / 40

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

A. Interest Rates

B. Gross Domestic Products(GDP)

C. Political Stability

D. Consumer Confidence

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The average score is 60%

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