FIN 104 CBT PRACTICE

Ace/Undergragra 1 week ago

0 118 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

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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 104

1 / 40

Table of Contents

What is Marginal Propensity to Save?

A. The fractional total income that is consumed

B. The additional disposable income that is consumed

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

D. The additional disposable income that is received

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On what basis are bills not classified?

A. Purpoise

B. Documentary backing

C. Period/Time

D. Purpose

3 / 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

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What’s the maturity range of Treasury Certificates?

A. 3 - 5 years

B. 30 - 60 days

C. 1 - 2 years

D. 90 - 180 days

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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

6 / 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 are alternative money used in payments in all transactions.

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

D. They are instruments subject to negotiation

7 / 40

What’s Negotiable Certificate of Deposit?

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

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

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

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

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What’s the maturity range of Treasury Bills?

A. 30 days to 90 days

B. 1 week to 6 weeks

C. 90 days to 180 days

D. 7 days to 30 days

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

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

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 a payment in due course by drawee or acceptor.

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10.

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

A. Market rate of interest

B. Foreign direct investment

C. Expected rate of return

D. Cost of capital asset

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11.

Which artisan was the advent of paper money associated with?

A. Merchant

B. Bricklayer

C. Blacksmith

D. Goldsmith

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12.

Money market instruments deal on

A. Provision of venture capital

B. Short term financing

C. Long term financing

D. Loans banks provide for financing

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13.

When is a bill discharged?

A. When the bill is of no value again.

B. When nobody is interested in the bill.

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

D. When limited liability is still attached.

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14.

Which is not a type of investment?

A. Fixed Investment

B. Replacement Investment

C. Inventory Investment

D. Moveable Investment

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15.

Who is not a party to a cheque?

A. Drawer

B. Drawee

C. Payee

D. Banker

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16.

Identify parties in a bill of exchange transaction

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

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

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

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

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17.

What is the main distinguishing feature of an Open Cheque?

A. Is not payable through the bank

B. Has no limit on the amount casheable

C. It cannot be endorsed to another person.

D. Is one that is payable over the counter.

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18.

Which are the types of Bill Endorsement?

A. Blank, Specialty, Unrestrictive and Conditional

B. Blank, Special, Restrictive and Conditional

C. Blank, Special, Unrestrictive and Unconditional

D. Blank, Specialized, Restrictive and Unconditional

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19.

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

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20.

What main advantage has Electronic money over paper money?

A. Instantaneous and borderless transactions

B. More acceptable in Nigeria

C. It increases the networth of the holder

D. Confers more authority to spend on the holder

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21.

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

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

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. savings naturally preceed investment

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22.

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 consumed

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

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23.

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

24 / 40

24.

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. total value of all projects the company is involved in

C. difference between income and expenditure on an investment

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

25 / 40

25.

Who are the marketers of commercial papers?

A. Merchant Banks

B. Individuals

C. Commercial Banks

D. Marketing companies

26 / 40

26.

Isolate the alternative that is not a Money Market Institution

A. CBN

B. Merchant Banks

C. IMF

D. Bureau de Change

27 / 40

27.

Which is not a characteristic of a cheque?

A. Amounts in words and figure must correspond

B. It must be properly signed by the drawer

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

D. It must not be multilated

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28.

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

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29.

What is meant by Endorsement of a Bill of Exchange?

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

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

30 / 40

30.

Why is thriftiness often seen as a virtue?

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

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

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

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

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31.

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

A. Beneficiaries

B. Issuing organization

C. Maturity period

D. End users

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32.

What do you understand by Investment?

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

B. . It is the difference between Income and saving

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

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

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33.

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'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.

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.

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34.

What is Commercial Paper?

A. Short term unsecured prommissory note

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

C. Document issued by Commercial Banks

D. None of the options

35 / 40

35.

What is the Present Value Criterion of Investment used for?

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

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

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

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

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36.

Which organisation is responsible for issuing treasury bills and certificates?

A. Merchant Banks

B. Commercial Banks

C. CBN

D. Government Treasuries

37 / 40

37.

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 lowest rate of return expected from an additional unit of a capital asset over its cost

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

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

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38.

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 capital asset after covering all its costs, except the rate of interest

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

39 / 40

39.

What is the main distinguishing feature of a Crossed Cheque?

A. Has 30 days maturity period.

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. Does not need endorsement.

40 / 40

40.

What do you understand by Money Aggregates?

A. Total money in the banking system

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

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

D. Summation of money with the populace

Your score is

The average score is 39%

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