Business Finance- Second Summative

Exam- Quarter 2- OFFLINE

Choose the letter of your answer.

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Christine Fe senajonon

1.It is related to the nature of the company's products and its operating strategy.
(1 Point)

Exchange rate risk

2.These are the funds that come from operating cash flows.
(1 Point)

Internally generated funds.

3.It provides the company financial flexibility

(1 Point)

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 Money Financing

4.Which of the following , is the fixed income instrument of the government? (1 Point)

Taxes

5.This core principle of finance holds that provided money can earn interest, any amount
of money is worth more the sooner it is received. (1 Point)

Concept of interest

6.It is the amount of principal expected to be repaid upon maturity.

(1 Point)

Cost value

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 7.This can be form of borrowing from banks or other lending institutions or issuance of
debt securities. (1 Point)

Debt Financing

8.This are short term instruments that is issued by corporation for their immediate needs.
(1 Point)

Corporate bonds

9.Below shows the reasons for rejecting the loan applications, except for one.
(1 Point)

Option 3

10.Below are the definitions of Brown and Reilly of the investment, which one is not?
(1 Point)

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 The exchange rates

11.This are generally used for working capital requirements

(1 Point)

Loan

12.This creates a contractual obligation for the borrower to pay the interest and the
principal. (1 Point)

Equity Financing

13.How many days does the cheque floats into clearing ?

(1 Point)

Just Three days

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 14.What refers to the risk created by the choice of capital structure?
(1 Point)

Financial risk

15. When the internally generated funds, this is the alternative.

(1 Point)

Financing

16.The uncertainty that an investment can be converted to cash at known price.

(1 Point)

Exchange rate risk

17.The CAMEL rating system components are:

(1 Point)

Capital Adequacy, Asset Quality, Management Indicators, Earnings quantity, Liquidity,

Sensitivity to risk factors

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 18.This refers to the issuance of new shares of stocks and retained earnings
plowed back into the operations of the company. (1 Point)

Equity Financing

19.This is the last priority or last choice when it comes to financing decisions.
(1 Point)

Financing

20.This means that investors are maximizing returns for a given level of risk.
(1 Point)

Risk

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12/10/2020