1. The SEC is the national regulatory that:

a. Acts as the provider of discounts, advances and financial support to financial institutions for them to maintain their liquidity.

b. Provides information for the knowledge-based research.

c. Reviews and approves all pre-need and HMO plans before selling these to the public.

d. None of the above.

2. Which of the following statements about liquidity and solvency ratios is/are true? Statement I. The current ratio expresses the capability of a firm's current assets to cover its current liabilities without resorting to selling its long-term assets to cover its current obligations. StatementII.A higher debt to equity ratio means that the financing aspect of the business comes more from its debtors than from its equity holders. StatementIII.In computing for the quick ratio, highly liquid assets such as marketable securities should be excluded from the numerator. StatementIV. Solvency refers to how quick, efficient, and cheap it is to convert a security into cash.

a. I only

b. I and II

c. I and III

d. I and IV

3. What is the primary objective of the Bangko Sentral ng Pilipinas?

a. To maintain price stability conducive to a balanced and sustainable economic growth.

b. To strengthen the mandatory deposit insurance coverage system to generate, preserve, maintain faith and confidence in the country's banking system; and protect it from illegal schemes and machinations.

c. To supervise the corporate sector, the capital market participants, the securities and investment instruments market, and the protection of the investing public.

d. To regulate and supervise the insurance, pre-need, and HMO industries in accordance with the provisions of the Insurance Code.

4. Which of the following is not an economic purpose of financial instruments?

a. Allows transfer of fund from entities with excess funds (investors) to entities who needs funds (issuer) for business purposes (e.g. to pay for tangible assets).

b. Permit transfer of fund that allows sharing of inherent risk associated with the cash flows coming from tangible asset investment between the issuer and investor.

c. Allows the money market to be the preferred place for firms to temporarily store excess funds up until such time they are needed again by the organization.

d. All are economic purposes of financial instruments.

5. Which of the following statements is/are not true? Statement 1: Obligation to deliver own shares worth a fix amount of cash is an example of financial asset. Statement 2: Warrants are printed call options that allow the holder to subscribe or purchase ordinary share in exchange for a fixed amount of each and another financial asset. Statement 3: Petty cash refers to cash balances kept on hand at various location to pay for major expenditure such as postage and other out of pocket expenditure. Statement 4: Financial instrument include financial assets, financial liabilities, and equities and derivatives.

a. Statement 1, Statement 2, and Statement 3

b. Statement 2, Statement 3, and Statement 4

c. Statement 1 and Statement 3

d. All statements are true.

6. Contract rate where a fixed rate exchange for a certain market rate at a certain maturity. Usually the one used as reference is the LIBOR.

a. Swap rate

b. Exchange rate

c. Forward rate

d. Future rate

7. Which of the following is not a type of a money-market instrument?

a. Treasury bills

b. Repurchase agreements

c. Time deposits

d. Derivatives

8. Which of the following is a disadvantage of using bonds?

a. Bondholders do not participate in extraordinary profits; the payments are limited to interest.

b. Bondholders do not have voting rights.

c. Debt (other than income bonds) produces fixed charges, increasing the firm's financial leverage.

d. Flotation costs of bonds are generally lower than those of ordinary (common) equity shares.

9. Is a type of derivative financial instrument in a form of contracts that exchanges cash flows as of a specified date or a series of specified dates based on a notional amount and fixed and floating rates.

a. Futures Contracts

b. Forward Contracts

c. Interest Rate Swaps

d. Foreign Currency Futures