CONFIDENTIAL TEST 1/ DGA 2522/SEM II (NOV) 202122

TEST 1

COURSE CODE : DGA 2252

COURSE NAME : FINANCIAL MANAGEMENT

DURATION : 1 HOUR 30 MINUTES

DATE :

NAME :

MATRIX NO. / IC NO. :

SECTION :

NAME OF LECTURER :

INSTRUCTION/ ARAHAN:

1. The question paper consists of 3 PARTS: A,B and C.

2. Answer ALL questions and write your answers on the answer sheet.

3. A LIST OF FORMULAE is appended on the last page for reference and student can bring
calculator for this paper.

4. Answers should be handwriting, neat and clear.

Question Number 1 2 3 Total (50 Marks)

Marks
CONFIDENTIAL TEST 1/ DGA 2522/SEM II (NOV) 202122

QUESTION 1 (20 MARKS)

Choose one answer for each question.

1. The needs of finance for a business are as follows, EXCEPT:-

a. Internal growth
b. Payment of expenditure
c. Product delivery
d. Expansion of business

2. Finance is the management of large amounts of _______, especially for the big companies.
a. Asset
b. Money
c. Workers
d. Capital

3. _______ is the variability of returns from those that are expected

a. Finance
b. Dividend
c. Interest
d. Risk

4. ________ is an external sources where an amount of money is borrowed from the bank, then repaid
with the interest over a set period of time.
a. Loan
b. Overdraft
c. Shares
d. Capital

5. Which term does NOT represent the type of business organizations?

a. Sole proprietorship
b. Partnership
c. Corporations
d. Management
CONFIDENTIAL TEST 1/ DGA 2522/SEM II (NOV) 202122

6. The _______ is the long term security yielding a fixed rate of interest, issued by a company and
secured against assets.
a. Sales of unwanted assets
b. Retained profit
c. Debentures
d. Shares

7. The examples of external sources of finance are :

I. Retained profit
II. Shares
III. Loan
IV. Overdraft
a. I, II and III only
b. II, III and IV only
c. I, II and IV only
d. I and II only

8. Which statement is NOT true about country risk?

a. Country risk is termed as political risk
b. Country risk is the risk associated with the use of debt financing.
c. Country risk devaluate your investment
d. Country risk is the risk of investing funds in another country.

9. ______ is the variability in returns resulting from fluctuations in the overall market conditions.
a. Market risk
b. Foreign exchange risk
c. Systematic risk
d. Liquidity risk

10. What is the interest rate risk?

a. Risk that is independent of economic, political and all other such factors.
b. Risk that an investment can be sold or bought quickly without significant price concession.
c. Risk that an investment’s value will change as the result of change in interest rate
d. Risk that is associated with the use of debt financing.
CONFIDENTIAL TEST 1/ DGA 2522/SEM II (NOV) 202122

QUESTION 2 (10 MARKS)

State whether each of the following statements ‘FALSE’ or ‘TRUE’.

1. Interest is the money that the government or lending institutions charges you for the privilege
if using their money to pay for your education.
________________

2. A normal yield curve is a upward-sloping yield curve indicates that long-term interest rates are
generally higher than short-term interest rates.
________________
3. Inflation cannot influence the equilibrium interest rate.
________________

4. The required return is the cost of funds obtained by selling an ownership.

________________

5. The interest rate is the cost of transferring borrowing.

________________

6. Financial intermediaries cannot help the institutions to repackage the risk.

________________

7. Bonds are the examples of capital market securities.

________________

8. Financial Institutions can act as savings institutions

________________

9. Financial market activity does not affects personal wealth, the behaviour of business firms and
economy as a whole.
________________

10. Financial market facilitate transfers of funds from deficit unit to surplus unit.
________________
CONFIDENTIAL TEST 1/ DGA 2522/SEM II (NOV) 202122

QUESTION 3 (20 MARKS)

Instruction: Answer ALL questions.

Arahan: Jawab SEMUA soalan.

1. Explain flow of finance that you have learned.

[5M]

2. State 5 importance of finance for business.

[5M]

3. List 5 types of financial markets.

[5M]

4. State 5 types of risk in finance.

[5M]