REVIEWER 🤬

Question 1

financial institution that accept deposits or offer loans

Answer 1

banks

Question 2

offers bank-like services but cannot accept deposits due to absence of banking license

Answer 2

non-bank institution

Question 3

offer transfer of risk transactions, cover the loss of the business

Answer 3

insurance companies

Question 4

industry of buying and selling currencies

Answer 4

currency exchange

Question 5

lending companies that offer small credits

Answer 5

microloan organization

Question 6

institution that offer quick cash loans “sanla”

Answer 6

pawnshop

Question 7

can be used in different purposes and whether those funds are used for short/long term

Answer 7

business loans in banks

Question 8

provide loans but have lighter bank requirements, may offer flexible amount to be loan

Answer 8

business loans in non banking institution

Question 9

details of personal data, income sources and credibility

Answer 9

application form

Question 10

presented to support credibility of the entity

Answer 10

financial statements

Question 11

client record of bank transactions

Answer 11

bank statements

Question 12

overall legality of the business organization

Answer 12

certificate of business registration

Question 13

presented in business proposal form

Answer 13

company profile

Question 14

land title, tax declaration, vicinity map

Answer 14

collateral documents

Question 15

offered submitted to and held by a custodian

Answer 15

credit information

Question 16

determine the credit standing of the applicant

Answer 16

credit investigation

Question 17

important in planning to forecast the outcome of the organization in future periods

Answer 17

projected financial statement

Question 18

it is a concept that money you have now is worth more than the identical sum in the future

Answer 18

time value of money

Question 19

it is the original amount borrowed

Answer 19

present value

Question 20

it is the principal plus the total interest earned over a stated period

Answer 20

future value

Question 21

it is the amount of money paid for the use of borrowed money

Answer 21

interest

Question 22

it is computed based on the principal amount (original) and based on the annual time

Answer 22

simple interest

Question 23

simple interest formula

Answer 23

I = Prt

Question 24

it is an interest earned is added to the principal and the new principal draws interest

Answer 24

compound interest

Question 25

formula of compound interest

Answer 25

FV = P (I+r) ^t

Question 26

number of times an interest is computed on a certain principal in one year

Answer 26

compounding frequency

Question 27

it is the sum of money borrowed that is expected to be paid back with interest

Answer 27

loan

Question 28

paying the debt with regular payments

Answer 28

amortization

Question 29

it is an example of an amortizing loan that requires the borrow to pay

Answer 29

housing loan

Question 30

form of loan that can be traded in through the Philippine Dealing and Exchange (PDEX) system

Answer 30

bond

Question 31

it is a series of payments required for a specific number of periods

Answer 31

annuity

Question 32

payments are due at the beginning of each payment perior

Answer 32

annuity due

Question 33

payment appears at the end of each period

Answer 33

ordinary annuity

Question 34

it is a process that a business uses in evaluating and selecting major projects or investment

Answer 34

capital budgeting

Question 35

it is a long term investment

Answer 35

capital expenditures

Question 36

all levels within the organization are encouraged to make suggestions for capital expenditures

Answer 36

investment proposal

Question 37

the financial personnels review and analyze the benefits and costs that may be derived from the proposal

Answer 37

review and analysis of the proposal

Question 38

these are projects that do not compete with other projects

Answer 38

independent projects

Question 39

these are the projects that compete with other projects, the approval of the one eliminate the other project

Answer 39

mutually exclusive projects

Question 40

the business with _______ will choose a project with the best opportunities

Answer 40

capital rationing

Question 41

if the business has _______ it will accept all the projects that pass the risk return criteria

Answer 41

unlimited funds

Question 42

net cash inflows one expects to get when the business/project had already started

Answer 42

cash returns

Question 43

evaluates a project by measuring the time it will take to recover the initial investment

Answer 43

payback method

Question 44

when cash returns are ______, the payback period is computed by adding the cash returns until the total is equal to the investment

Answer 44

uneven cash returns

Question 45

it is the difference between the present value of cash inflows and the net present value of cash outflows over a period

Answer 45

net present value

Question 46

it is the most used technique in capital budgeting where it was defined as the discount rate that makes the net present value of an investment equals to zero

Answer 46

internal rate return (IRR)

Question 47

it is efficient and effective way to use personal or business funds

Answer 47

investing

Question 48

it can be considered as funds that can either multiply or incure a loss

Answer 48

investment

Question 49

uncertainties or chances that the outcomes of investments are different from what is expected

Answer 49

investment risk

Question 50

uncertainty due to economic development or factors that affect the market

Answer 50

market risk

Question 51

chance that an investor is unable to sell an investment due to change in price

Answer 51

liquidity risk

Question 52

concentration of loss that can be incurred due to lack of diversification

Answer 52

concentration risk

Question 53

risk that money investment in a government bond may be uncollectible

Answer 53

credit risk

Question 54

risk of loss from shifting from one investment to another

Answer 54

reinvestment risk

Question 55

risk that an investment may not be able to sustain to purchasing power

Answer 55

inflation risk

Question 56

risk that an investment may be stepped or pulled out due to unforeseen events

Answer 56

horizon risk

Question 57

a person will live too long and may outline his/her investments

Answer 57

longevity risk

Question 58

individual market risks that may affect investment from different countries

Answer 58

foreign investment risk

Question 59

expected profits to receive from an investment

Answer 59

investment returns

Question 60

an investment will yield a higher return only if the investor accepts a higher risk or possibility of losses

Answer 60

risk return trade off

Question 61

primarily driven by the availability of resources while balancing the advantages and disadvantages of investment opportunities

Answer 61

risk tolerance

Question 62

characteristics of an investor whose willingness in accepting risk is very low

Answer 62

conservative risk tolerance

Question 63

an investor is willing to put average resources and accept some risks

Answer 63

moderate risk tolerance

Question 64

investor is willing to put more resources, accept maximum risks on a high quality investment

Answer 64

aggressive risk tolerance

Question 65

planning of investment opportunities based on the risk tolerance of an investor

Answer 65

portfolio management

Question 66

investors has stagnant or excess of resources, they engage in different investing activities to gain profits

Answer 66

investment diversification