#1
What is a common financial instrument used to raise capital for a company?
Corporate bonds
Savings account
Personal loan
Credit card
#2
Which of the following is a characteristic of common stock?
Preference in dividend payments
Fixed maturity date
Voting rights
Guaranteed return of investment
#3
Which of the following is an example of a fixed-income security?
Common stock
Convertible bond
Preferred stock
Treasury bond
#4
What is the role of a stock exchange in financial markets?
To regulate the banking sector
To provide loans to companies
To facilitate the buying and selling of securities
To set interest rates
#5
What is the primary function of a mutual fund?
To provide insurance coverage
To manage retirement accounts
To pool money from investors and invest in diversified assets
To issue debt securities
#6
Which financial statement provides information about a company's profitability?
Balance sheet
Cash flow statement
Income statement
Statement of retained earnings
#7
What is the formula for the price-to-earnings (P/E) ratio of a stock?
Market price per share / Earnings per share
Earnings per share / Market price per share
Dividend per share / Earnings per share
Earnings per share / Dividend per share
#8
What does the Capital Asset Pricing Model (CAPM) help in determining?
Expected return on a stock
Current stock price
Historical stock performance
Future market trends
#9
What is the primary purpose of a derivative?
To hedge against financial risk
To maximize shareholder value
To increase market volatility
To regulate financial markets
#10
Which financial instrument represents ownership in a pool of mortgages?
Treasury bills
Mortgage-backed securities
Preferred stock
Commercial paper
#11
What does the debt-to-equity ratio indicate about a company?
Its ability to generate profits
The proportion of debt and equity financing in its capital structure
Its market share
Its dividend payout ratio
#12
Which of the following is a measure of the volatility of a stock?
Price-to-earnings ratio
Beta coefficient
Debt-to-equity ratio
Return on investment
#13
Which of the following is NOT a factor that affects the valuation of a stock?
Company's earnings growth rate
Market interest rates
Geopolitical events
Industry competition
#14
What is the concept of intrinsic value in stock valuation?
The current market price of the stock
The value of the stock based on its earnings potential
The value of dividends paid by the stock
The value of stock options associated with the stock
#15
Which financial instrument gives the holder the right to buy a specified amount of a security at a predetermined price within a specified time frame?
Futures contract
Call option
Put option
Swaps
#16
What is the formula for calculating the present value of a future cash flow?
Future value / (1 + interest rate)^n
Future value * (1 + interest rate)^n
Future value * interest rate
Future value - interest rate
#17
What is the key difference between a forward contract and a futures contract?
Futures contracts are standardized, while forward contracts are customized
Futures contracts have no expiration date, while forward contracts do
Forward contracts are traded on exchanges, while futures contracts are not
Futures contracts involve physical delivery, while forward contracts do not