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Question 1

Which institution in the Philippines sets the official interest rate?

Answer 1

C. BSP

Question 2

A higher interest rate usually leads to:

Answer 2

B. Higher borrowing costs

Question 3

What is interest rate?

Answer 3

B. The cost of borrowing or lending money or the cost of credit

Question 4

What is the official interest rate in the Philippines?

Answer 4

C. Reverse repo rate

Question 5

What is a variable interest rate?

Answer 5

B. A rate that changes as the index changes

Question 6

What is the real interest rate?

Answer 6

C. The interest rate adjusted for inflation or deflation

Question 7

Why is the real interest rate important?

Answer 7

C. It reflects the true return on savings and investments

Question 8

What is compound interest?

Answer 8

C. Giving interest to interest earned

Question 9

What is the opportunity cost of money?

Answer 9

B. The price of money

Question 10

What is a line of credit?

Answer 10

A. Lending arrangement with a maximum amount of funds

Question 11

In a discounted loan, when is interest paid?

Answer 11

D. In advance

Question 12

What is a line of credit?

Answer 12

C. Lending arrangement with a maximum amount of funds

Question 13

What does YM equal for simple loans?

Answer 13

A. Simple Interest Rate

Question 13

What does the formula for EYM involve?

Answer 13

D. All of the above

Question 14

What is Yield to Maturity (YTM)?

Answer 14

B. Rate that makes the NPV of cash flows equal to current value

Question 15

What happens when interest rates are high?

Answer 15

C. Demand for money decreases

Question 16

What is the pure or risk-free interest rate usually associated with?

Answer 16

D. Government securities

Question 17

What does interest rate ensure in the economy?

Answer 17

B. Current savings will flow into investment

Question 18

Why monitor market trends?

Answer 18

B. To meet evolving customer expectations

Question 19

What is one benefit of trend analysis?

Answer 19

C. Anticipating changes

Question 20

What is a technological trend?

Answer 20

A. New innovations impacting industries

Question 20

What does data overload do?

Answer 20

C. Hinder insight gathering

Question 21

How do businesses respond to trends?

Answer 21

C. By strategic response and consumer engagement

Question 22

What happens if inflation expectations rise?

Answer 22

C. Nominal interest rate increases

Question 23

Why is the effective interest rate higher in a discounted loan?

Answer 23

D. Interest is paid in advance

Question 24

What does interpolation help calculate?

Answer 24

B. Exact yield to maturity

Question 25

What is the yield if coupon is ₱300 and price is ₱10,000?

Answer 25

A. 3%

Question 26

What tool does BSP use to maintain economic stability?

Answer 26

A. Interest rate

Question 27

What is a compensating balance?

Answer 27

B. A required deposit the borrower must maintain

Question 28

Based on the real interest rate, if a savings account offers a nominal interest rate of 5% and inflation is at 3.5%, what is the real interest rate?

Answer 28

A. 1.5%