#1
Which of the following is a financial statement that shows a company's revenues and expenses over a period of time?
Income statement
ExplanationShows company's financial performance.
#2
What does ROI stand for in finance?
Return on Investment
ExplanationMeasure of investment profitability.
#3
Which of the following is a measure of a company's ability to pay off its short-term obligations?
Quick ratio
ExplanationMeasures short-term liquidity.
#4
Which of the following is NOT a type of financial ratio?
Inventory ratio
ExplanationNot a common financial ratio.
#5
Which financial statement represents a snapshot of a company's financial position at a specific point in time?
Balance sheet
ExplanationSummarizes assets, liabilities, and equity.
#6
Which of the following is NOT a measure of investment risk?
Earnings per share
ExplanationIndicator of company's profitability.
#7
What is the term for the rate at which the general level of prices for goods and services is rising?
Inflation
ExplanationEconomic measure of price increase.
#8
What is the primary goal of financial risk management?
To minimize risks to an acceptable level
ExplanationManaging risks within acceptable limits.
#9
Which of the following is NOT a type of financial risk?
Production risk
ExplanationOperational, market, and credit risks are financial.
#10
What is the formula to calculate the current ratio?
Current Assets / Current Liabilities
ExplanationMeasures liquidity and solvency.
#11
What is the main purpose of diversification in investment?
To reduce risk by spreading investments across different assets
ExplanationMinimizes risk through asset variety.
#12
What is systematic risk also known as?
Market risk
ExplanationRisk inherent to the entire market.
#13
What is leverage in finance?
The use of borrowed funds to increase the return on equity
ExplanationAmplifies returns through borrowed capital.
#14
What does the term 'hedging' mean in finance?
Reducing risk by taking offsetting positions
ExplanationMinimizing risk exposure through strategies.
#15
What does CAPM stand for in finance?
Capital Asset Pricing Model
ExplanationQuantifies expected return on an asset.
#16
What is the formula to calculate the net present value (NPV) of an investment?
Present Value of Cash Flows - Initial Investment
ExplanationAssesses profitability of an investment.
#17
What is the formula to calculate the earnings per share (EPS) of a company?
Net Income / Number of Outstanding Shares
ExplanationProfit attributable to each outstanding share.