#1
What is compound interest?
Interest calculated on both the principal amount and the accumulated interest
ExplanationInterest on initial amount plus earned interest.
#2
What is the formula for calculating simple interest?
(P * r * t) / 100
ExplanationPrincipal multiplied by rate and time, divided by 100.
#3
What does the term 'ROI' stand for in finance?
Return on Investment
ExplanationPercentage representation of profit relative to investment.
#4
What is the formula for calculating ROI (Return on Investment)?
(Net Profit / Cost of Investment) * 100
ExplanationPercentage calculation of net profit from investment.
#5
What does APR stand for in the context of loans and credit cards?
Annual Percentage Rate
ExplanationRepresentation of yearly borrowing cost.
#6
Which of the following is an example of a liquid asset?
Stocks
ExplanationAsset easily convertible to cash without significant loss.
#7
What is the future value of an investment if $1000 is invested at 5% interest for 3 years compounded annually?
$1157.63
ExplanationCompounded growth of $1000 at 5% over 3 years.
#8
What is the present value of $2000 to be received in 5 years, assuming a discount rate of 8%?
$1600
ExplanationDiscounted value of $2000 received in 5 years at 8%.
#9
What is the formula for calculating the standard deviation of a data set?
∑(x - μ)^2 / (N - 1)
ExplanationMeasure of data dispersion from the mean.
#10
What is the formula for calculating the future value of an annuity?
PMT * [(1 - (1 + r)^(-n)) / r]
ExplanationCalculation for the future worth of a series of equal payments.
#11
What is the formula for the present value of an annuity?
PMT * [((1 + r)^n - 1) / r]
ExplanationCurrent worth of a series of equal payments.
#12
Which of the following is a measure of investment risk?
Standard Deviation
ExplanationIndicator of variability in investment returns.
#13
Which of the following is NOT a measure of central tendency?
Range
ExplanationNot a measure indicating the center of a distribution.
#14
Which of the following is NOT a type of financial ratio?
Economic ratios
ExplanationCategory not representing financial relationships.
#15
What does the P/E ratio represent?
Price to Earnings ratio
ExplanationRelationship between stock price and earnings per share.
#16
What is the formula for calculating the earnings per share (EPS)?
Net Income / Number of Shares Outstanding
ExplanationProfit allocated to each outstanding share.
#17
Which of the following is NOT a characteristic of a call option?
Has no expiration date
ExplanationOption type with a finite duration.