Home CBT TEST FIN 104 CBT PRACTICE

CBT TEST

FIN 104 CBT PRACTICE

Phil

June 20, 2024

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 104 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 104

1 / 40

What do you understand by Investment?

A. . It is the difference between Income and saving

B. It is the sacrifice of certain economic resources for future uncertain benefits in terms of resources

C. It's the total amount of money one has in the bank

D. It is the total deposits received by an Investment Bank

2 / 40

Why is thriftiness often seen as a virtue?

A. . This is because an increase in thrift on the part of an individual leads to greater savings and wealth.

B. This is because an inrease in thrift on the part of the individual leads to greater return on investment.

C. This is because an increase in thrift will increase the amount of money in the individual's bank account

D. This is because an increase in thrift will increase an individual's networth.

3 / 40

Which organisation is responsible for issuing Commercial Papers?

A. Large and reputable companies of unquestionable credit strength

B. Central Bank of Nigeria

C. Merchant Banks

D. Commerical Banks

4 / 40

Which is not a type of investment?

A. Fixed Investment

B. Replacement Investment

C. Inventory Investment

D. Moveable Investment

5 / 40

Which organisation is responsible for issuing treasury bills and certificates?

A. Government Treasuries

B. CBN

C. Commercial Banks

D. Merchant Banks

6 / 40

Which is not a way through which a bill can be discharged?

A. Where there is a payment in due course by drawee or acceptor.

B. Where the drawee or acceptor becomes the holder of the bill at or after maturity.

C. Where through merger the acceptor becomes the holder of the bill at or after maturity.

D. Where there is no express waiver or renunciation by the holder of the bill

7 / 40

For an investment to be made there are various factors that must considered; which is not one of them?

A. Foreign direct investment

B. Cost of capital asset

C. Market rate of interest

D. Expected rate of return

8 / 40

What do you understand by Negotiable Instrument?

A. They are near cash instruments that are acceptable means of payments in transactions, as well as for debt settlement.

B. They include those instruments used in entertainment in the financial sector.

C. They are alternative money used in payments in all transactions.

D. They are instruments subject to negotiation

9 / 40

Mathematically, Net Present Value of an investment is the

A. difference between total present value of cash outflows and total present value of cash inflows occurring in periods over the entire life of the project

B. the difference between total cash outflows and total cash inflows occurring in periods over the entire life of the project

C. total value of all projects the company is involved in

D. difference between income and expenditure on an investment

10 / 40

10.

What is Interbank Market?

A. None of A-C

B. It's a market where commercial banks trade on deposits

C. It is an arrangement that enables banks to balance their liquidity position

D. It's an arrangement for monitoring Commercial Bank activities by CBN

11 / 40

11.

Who are the marketers of commercial papers?

A. Marketing companies

B. Merchant Banks

C. Commercial Banks

D. Individuals

12 / 40

12.

What is Marginal Propensity to Save?

A. The additional disposable income that is consumed

B. The additional disposable income that is received

C. The fractional total income that is consumed

D. The additional disposable income that is saved i.e. not consumed

13 / 40

13.

Isolate the alternative that is not a Money Market Institution

A. Bureau de Change

B. IMF

C. CBN

D. Merchant Banks

14 / 40

14.

Who is not a party to a cheque?

A. Drawer

B. Payee

C. Banker

D. Drawee

15 / 40

15.

What’s the maturity range of Treasury Bills?

A. 1 week to 6 weeks

B. 7 days to 30 days

C. 30 days to 90 days

D. 90 days to 180 days

16 / 40

16.

How do you define Saving?

A. The difference between disposable income and consumption

B. The difference between the productive and monetary secors

C. The total amount of money in circulation at a point in time

D. The amount of money in one's bank account

17 / 40

17.

What is the main distinguishing feature of a Crossed Cheque?

A. Does not need endorsement.

B. It is only payable through the bank and not payable over the counter.

C. It can be paid through the counter of the bank

D. Has 30 days maturity period.

18 / 40

18.

What is meant by Endorsement of a Bill of Exchange?

A. It is the process of signing a bill of exchange by one person at the full glare of a new holder

B. It is the process of writing a bill of exchange from one person to another such that the benefits written on the bill becomes payable to the new holder

C. It is the process of transferring a bill of exchange from one person to another such that the benefits written on the bill becomes payable to the new holder

D. It is the process of transferring ownership of a bill of exchange from one person to many new beneficiaries at a time.

19 / 40

19.

On what basis are bills not classified?

A. Period/Time

B. Purpoise

C. Purpose

D. Documentary backing

20 / 40

20.

What do you understand by Money Aggregates?

A. Refers to the several of a country's money

B. Summation of money with the populace

C. Total amount of money in the vault of Central Bank of Nigeria

D. Total money in the banking system

21 / 40

21.

What then is the paradox of thrift?

A. That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a lower propensity to invest.

B. That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a higher propensity to invest.

C. That if people decide to save less, they may end up saving more, unless if the decrease in propensity to save is accompanied by a lower propensity to invest.

D. That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a higher propensity to invest.

22 / 40

22.

What do you understand by Marginal Efficiency of Capital?

A. This refers to the highest rate of return expected from an additional unit of a capital asset over its cost

B. This refers to the minimum rate of return expected from an additional unit of a capital asset over its cost

C. This refers to the average rate of return expected from an additional unit of a capital asset over its cost

D. This refers to the lowest rate of return expected from an additional unit of a capital asset over its cost

23 / 40

23.

Which of the following is not a Money Market Instrument?

A. Negotiable Certificate of Deposit

B. Treasury certificates

C. Long term repurchase agreement

D. Bankers Unit Fund

24 / 40

24.

Which artisan was the advent of paper money associated with?

A. Bricklayer

B. Blacksmith

C. Goldsmith

D. Merchant

25 / 40

25.

Which is not a characteristic of a cheque?

A. It must not be multilated

B. Amounts in words and figure must correspond

C. It must be properly signed by the drawer

D. The drawer's account need not be correctly specified.

26 / 40

26.

Although Treasury Certificates are generally similar to Treasury Bills, how do they differ from each other?

A. Maturity period

B. Issuing organization

C. Beneficiaries

D. End users

27 / 40

27.

What is the Present Value Criterion of Investment used for?

A. It is used to evaluate the profitability of an investment project

B. It is used to evaluate the value of an investment project

C. It is used to raise funds for an investment project

D. It is used to measure the cost of an investment project

28 / 40

28.

Which are the types of Bill Endorsement?

A. Blank, Specialty, Unrestrictive and Conditional

B. Blank, Special, Restrictive and Conditional

C. Blank, Specialized, Restrictive and Unconditional

D. Blank, Special, Unrestrictive and Unconditional

29 / 40

29.

What is Commercial Paper?

A. It's a security document issued by the Central Bank

B. Document issued by Commercial Banks

C. None of the options

D. Short term unsecured prommissory note

30 / 40

30.

What is the main distinguishing feature of an Open Cheque?

A. Is one that is payable over the counter.

B. Is not payable through the bank

C. It cannot be endorsed to another person.

D. Has no limit on the amount casheable

31 / 40

31.

Pre-Keynesian economists argue that saving and investment are not equal for certain reasons except

A. savings naturally preceed investment

B. They also pointed out that the excess of investment over saving has led banks to create new credit

C. savings and investment depend upon different factors and are made for different purposes and motives

D. They also pointed out that the excess of investment over saving has led banks to create new credit

32 / 40

32.

What is Marginal Efficiency of Investment?

A. It is the rate of return expected from a given investment on a capital asset including all its costs, except the rate of interest

B. It is the rate of return expected from a given investment on a capital asset after covering all its costs, except the rate of interest

C. It is the rate of return expected from a given investment on a fixed asset after covering all its costs

D. It is the rate of return expected from a given investment on a money asset after covering all its costs, except the rate of interest

33 / 40

33.

What’s the maturity range of Treasury Certificates?

A. 3 - 5 years

B. 1 - 2 years

C. 90 - 180 days

D. 30 - 60 days

34 / 40

34.

What do you understand by Average Propensity to Save?

A. It is the proportion of disposable income that is saved

B. It is the proportion of disposable income that is consumed

C. It is the proportion of total income that is saved

D. It is the proportion of disposable income that is invested

35 / 40

35.

What do you understand by Countermand in relation to cheques?

A. It'sa written order, signed by the payee that is used by a drawer to notify the drawee (i.e. the bank) to pay after necessary deductions.

B. It's a written order, signed by the drawer (i.e. the customer) that is used by a drawer to notify the drawee (i.e. the bank) to pay the payee without delay.

C. It's an order issued by the drawer of the cheque to the payee to present the cheque after an occurrence of a future event.

D. It's a written order, signed by the drawer (i.e. the customer) that is used by a drawer to notify the drawee (i.e. the bank) to stop the payment of a cheque, he had previously issued.

36 / 40

36.

What main advantage has Electronic money over paper money?

A. It increases the networth of the holder

B. More acceptable in Nigeria

C. Instantaneous and borderless transactions

D. Confers more authority to spend on the holder

37 / 40

37.

Money market instruments deal on

A. Loans banks provide for financing

B. Provision of venture capital

C. Short term financing

D. Long term financing

38 / 40

38.

Table of Contents

When is a bill discharged?

A. When the bill is of no value again.

B. When limited liability is still attached.

C. When nobody is interested in the bill.

D. When all the orders it contains have been carried out.

39 / 40

39.

What’s Negotiable Certificate of Deposit?

A. It's a certicate issued by the CBN to Commercial Banks to collect deposits from customers

B. It's a document banks issue to large-sum depositors

C. This is long term instrument sold by banks to depositors

D. This is short term instrument sold by banks to depositors

40 / 40

40.

Identify parties in a bill of exchange transaction

A. Drawer, Drawee, Acceptor, Payee, Andorser, Endorsee

B. Drawer, Drawee, Acceptor, Payee, Endorser, Endorsee.

C. Drawer, Drawee, Acceptor, Payee, Payer, Endorser, Endorsee

D. Drawer, Drawee, Acceptee, Payee, Endorser, Endorsee

Your score is

The average score is 39%