CBT TEST

FIN 104 CBT PRACTICE

Phil June 20, 2024Last Updated: June 20, 2024

0 925 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 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 is the main distinguishing feature of a Crossed Cheque?

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

B. Does not need endorsement.

C. Has 30 days maturity period.

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

2 / 40

What’s the maturity range of Treasury Bills?

A. 90 days to 180 days

B. 7 days to 30 days

C. 1 week to 6 weeks

D. 30 days to 90 days

3 / 40

Which organisation is responsible for issuing treasury bills and certificates?

A. Merchant Banks

B. Government Treasuries

C. Commercial Banks

D. CBN

4 / 40

What is the main distinguishing feature of an Open Cheque?

A. Has no limit on the amount casheable

B. It cannot be endorsed to another person.

C. Is not payable through the bank

D. Is one that is payable over the counter.

5 / 40

How do you define Saving?

A. The difference between disposable income and consumption

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

C. The difference between the productive and monetary secors

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

6 / 40

What’s the maturity range of Treasury Certificates?

A. 3 - 5 years

B. 1 - 2 years

C. 90 - 180 days

D. 30 - 60 days

7 / 40

Who is not a party to a cheque?

A. Payee

B. Banker

C. Drawee

D. Drawer

8 / 40

What is Commercial Paper?

A. Document issued by Commercial Banks

B. None of the options

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

D. Short term unsecured prommissory note

9 / 40

When is a bill discharged?

A. When limited liability is still attached.

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

C. When the bill is of no value again.

D. When nobody is interested in the bill.

10 / 40

10.

Identify parties in a bill of exchange transaction

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

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

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

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

11 / 40

11.

On what basis are bills not classified?

A. Purpose

B. Purpoise

C. Documentary backing

D. Period/Time

12 / 40

12.

What is Interbank Market?

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

B. None of A-C

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

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

13 / 40

13.

What do you understand by Countermand in relation to cheques?

A. 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.

B. 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.

C. 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.

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.

14 / 40

14.

Who are the marketers of commercial papers?

A. Commercial Banks

B. Merchant Banks

C. Individuals

D. Marketing companies

15 / 40

15.

Isolate the alternative that is not a Money Market Institution

A. Bureau de Change

B. IMF

C. Merchant Banks

D. CBN

16 / 40

16.

What is Marginal Propensity to Save?

A. The additional disposable income that is received

B. The additional disposable income that is consumed

C. The fractional total income that is consumed

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

17 / 40

17.

Table of Contents

What is Marginal Efficiency of Investment?

A. 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

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

18 / 40

18.

What do you understand by Marginal Efficiency of Capital?

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

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

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

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

19 / 40

19.

Mathematically, Net Present Value of an investment is the

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

B. 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

C. difference between income and expenditure on an investment

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

20 / 40

20.

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

A. Maturity period

B. End users

C. Issuing organization

D. Beneficiaries

21 / 40

21.

Which is not a type of investment?

A. Inventory Investment

B. Fixed Investment

C. Replacement Investment

D. Moveable Investment

22 / 40

22.

What is meant by Endorsement of a Bill of Exchange?

A. 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

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

C. 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

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

23 / 40

23.

What is the Present Value Criterion of Investment used for?

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

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

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

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

24 / 40

24.

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

A. Foreign direct investment

B. Market rate of interest

C. Cost of capital asset

D. Expected rate of return

25 / 40

25.

What main advantage has Electronic money over paper money?

A. More acceptable in Nigeria

B. It increases the networth of the holder

C. Confers more authority to spend on the holder

D. Instantaneous and borderless transactions

26 / 40

26.

Which is not a characteristic of a cheque?

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

B. Amounts in words and figure must correspond

C. It must not be multilated

D. It must be properly signed by the drawer

27 / 40

27.

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

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

B. savings naturally preceed investment

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

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

28 / 40

28.

Money market instruments deal on

A. Provision of venture capital

B. Loans banks provide for financing

C. Long term financing

D. Short term financing

29 / 40

29.

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 total income that is saved

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

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

30 / 40

30.

Which are the types of Bill Endorsement?

A. Blank, Special, Restrictive and Conditional

B. Blank, Specialty, Unrestrictive and Conditional

C. Blank, Special, Unrestrictive and Unconditional

D. Blank, Specialized, Restrictive and Unconditional

31 / 40

31.

What then is the paradox of thrift?

A. 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.

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

32 / 40

32.

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 are instruments subject to negotiation

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

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

33 / 40

33.

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 increase in thrift will increase an individual's networth.

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

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

34 / 40

34.

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

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

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

35 / 40

35.

Which artisan was the advent of paper money associated with?

A. Bricklayer

B. Goldsmith

C. Merchant

D. Blacksmith

36 / 40

36.

Which of the following is not a Money Market Instrument?

A. Bankers Unit Fund

B. Negotiable Certificate of Deposit

C. Treasury certificates

D. Long term repurchase agreement

37 / 40

37.

Which organisation is responsible for issuing Commercial Papers?

A. Central Bank of Nigeria

B. Large and reputable companies of unquestionable credit strength

C. Merchant Banks

D. Commerical Banks

38 / 40

38.

What’s Negotiable Certificate of Deposit?

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

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

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

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

39 / 40

39.

What do you understand by Money Aggregates?

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

B. Total money in the banking system

C. Summation of money with the populace

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

40 / 40

40.

What do you understand by Investment?

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

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

C. . It is the difference between Income and saving

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

Your score is

The average score is 39%