#1
What is compound interest?
Interest calculated only on the principal amount
Interest calculated on both the principal amount and the accumulated interest
Interest paid upfront
Interest calculated annually
#2
What is the formula for calculating simple interest?
P * r * t
(P * r * t) / 100
(P + r + t) / 100
(P * r + t) / 100
#3
What does the term 'ROI' stand for in finance?
Return on Investment
Rate of Inflation
Revenue over Income
Risk of Investment
#4
What is the formula for calculating ROI (Return on Investment)?
(Net Profit / Cost of Investment) * 100
(Net Profit - Cost of Investment) / Cost of Investment
(Cost of Investment / Net Profit) * 100
(Cost of Investment - Net Profit) / Net Profit
#5
What does APR stand for in the context of loans and credit cards?
Average Payment Rate
Annual Percentage Rate
Advanced Payment Ratio
Adjusted Principal Return
#6
Which of the following is an example of a liquid asset?
Real Estate
Stocks
Jewelry
401(k) retirement account
#7
What is the future value of an investment if $1000 is invested at 5% interest for 3 years compounded annually?
#8
What is the present value of $2000 to be received in 5 years, assuming a discount rate of 8%?
#9
What is the formula for calculating the standard deviation of a data set?
∑(x - μ) / N
∑(x - μ)^2 / (N - 1)
∑(x - μ)^2 / N
∑(x - μ) / (N - 1)
#10
What is the formula for calculating the future value of an annuity?
PMT * [((1 + r)^n - 1) / r]
PMT * [(1 + r)^n]
PMT * [(1 - (1 + r)^(-n)) / r]
PMT * [(1 - (1 + r)^n) / r]
#11
What is the formula for the present value of an annuity?
PMT * [(1 - (1 + r)^n) / r]
PMT * [(1 + r)^n]
PMT * [(1 - (1 + r)^(-n)) / r]
PMT * [((1 + r)^n - 1) / r]
#12
Which of the following is a measure of investment risk?
Standard Deviation
Variance
Covariance
Correlation Coefficient
#13
Which of the following is NOT a measure of central tendency?
#14
Which of the following is NOT a type of financial ratio?
Liquidity ratios
Profitability ratios
Economic ratios
Solvency ratios
#15
What does the P/E ratio represent?
Profit to Expense ratio
Price to Equity ratio
Profit to Earnings ratio
Price to Earnings ratio
#16
What is the formula for calculating the earnings per share (EPS)?
Net Income / Number of Shares Outstanding
Net Income - Dividends / Number of Shares Outstanding
Net Income / Total Assets
Net Income + Dividends / Number of Shares Outstanding
#17
Which of the following is NOT a characteristic of a call option?
Gives the holder the right to buy an asset at a predetermined price
The seller (writer) of the call option is obligated to sell the asset if the holder exercises the option
Usually used as a hedge against declining asset prices
Has no expiration date