Investment and Portfolio Management - Prelim

General Instruction: This exam is worth 100 points in total. Send your answer sheet on or before 2:00 PM of October 15, 2022.

* Required

1. Name *

2. What is a real asset? *

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These are tangible possessions with intrinsic value because of their nature and characteristics.

It is a liquid asset that derives its worth from a legal claim to ownership or a contractual right.

These are the assets that a business or investor owns which are restricted in nature.

3. What is a financial asset?

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These are tangible possessions with intrinsic value because of their nature and characteristics.

It is a liquid asset that derives its worth from a legal claim to ownership or a contractual right.

These are the assets that a business or investor owns which are restricted in nature.

4. They can be quickly converted into money.

*

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Current Assets

Long-term Assets

Assets

5. With this kind of asset, one must sell it for cash in order to realize that value. *

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Financial Asset

Current Asset

Investment

6. In a market system, some people are earning more than they want to spend right now. This is the main idea behind what model?
*

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Consumption Timing

Allocation of Risk

Separation of Ownership and Management

7. “How
can you shift your purchasing power from high-earnings periods to low-earnings
periods of life?” is the main question that ____________________ deals with. *

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Investment and Portfolio Management

Diversification

Securitization

8. Minimising risk is critical to avoid adverse situations such as:

*

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Unplanned Costs

Holidays

Surprised Visitation

9. Which is not an example of risk response? *

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Risk Mitigation

Risk Minimization

Risk Intolerance
10. It involves taking all reasonable steps to drive a risk's probability and/or impact to zero.
*

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Risk Acceptance

Risk Minimization

Risk Avoidance

11. Machine maintenance might be described as what type of risk response?

*

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Risk Hindrance

Risk Avoidance

Risk Minimization

12. It is a plan to get ready for potential hazards and limit their impact.
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Risk Minimization

Risk Avoidance

Risk Mitigation

13. Who can develop a reporting process to detail each firm expense and evaluate and manage cost risks?
*

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Accounting Department

Finance Department

Board of Directors

14. Because the risk is no longer existing, it is the most effective technique to manage a risk. It should be employed whenever possible as it is the recommended method of danger control. What *
risk response is this?

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Risk Avoidance

Risk Elimination

Risk Mitigation

15. "Materials delivered cut to size to remove

the use of blades." What type of risk response is this? *

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Risk Avoidance

Risk Elimination

Risk Mitigation

16. "Using cordless equipment to get rid of trailing

cables." What type of risk response is this? *

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Risk Avoidance

Risk Elimination

Risk Hindrance

17. "Using extendable tools to eliminate work at

height." What type of risk response is this? *

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Risk Avoidance

Risk Elimination

Risk Hindrance

18. "There
are a lot of corporations out there with the same person as its owner and manager." This is the main problem that what model raises?
*

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Consumption Timing

Separation of Ownership and Management

Allocation of Risks
19. As
investors, should we be concerned with how the management operates with our
money?
*

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Yes

No

Maybe

20. Which of the following is not a client of the financial system? *

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Household Sector

Government Sector

Housemate Sector

21. It is a mechanism that enables the transfer of money among participants in the financial market, including lenders, investors, and borrowers.
*

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Market

Financial System

Business Transactions

22. This client is made up of one or more individuals who live together as a family. This client is the owner of all economic resources in the country.
*

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Business Sector

Consumers

Household Sector

23. Which is not an example of an economic resource? *

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Land

Labor

Fully-depreciated Asset

24. What is the name of a privately held company that produces goods and services before selling them?
*

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Seller

Business

Corporation

25. The party best suited for this upkeep of financial systems is this one.
*

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Private Sector

Legislators

Government Sector

26. It is intended to guarantee the financial systems' proper operation.

*

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The Business Sector

The Household Sector

The Government Sector

27. It is directly related to the loanable money and interest rates in each financial system.
*

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The Business Sector

The Household Sector

The Government Sector

28. It determines an economy's interest rate setting.
*

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Central Bank

Government

Lenders

29. It is the only organization with the power to increase a nation's money supply. *

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Registered Money Suppliers

Government

Central Bank

30. It is under obligation to prevent the printing of excessive amounts of money that flood the market.
*

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BSP

Government

Central Bank

31. In order to purchase the liabilities of other companies, they obtain capital by selling their own obligations.
*

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Financial Markets

Financial Intermediaries

Financial Sector

32. When a bank needs money, it borrows it (by accepting deposits) and then lends it to (or buys the loans from) other borrowers. This is an example of
*

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Financial Transaction

Financial Intermediation

Government Inteference

33. They serve institutional clients in tasks like capital raising and mergers and acquisitions by fusing their knowledge of the financial services sector with their analytical brilliance and compelling *
communication abilities.

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Intermediators

Brokers

Investment Bankers

34. Which is not an example of an underlying asset behind a derivative?

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Currency

Commodity

Birth right

35. This market is regarded as being the least structured.

*

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Over-the-counter Market

Direct search Market

Black Market

36. This kind of market emerges as trade activity in a particular asset class picks up.
*

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Dealer Market

Broker Market

Black Market
37. It is a term used to explain how trade and technology have increased connectivity and interdependence throughout the world.
*

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World Trade

Barter

Globalization

38. Which is not an example of how businesses engage in international business? *

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Licensing

International Trade

Merger

39. The application of mathematical methods to resolve financial issues is known as ____________________.
*

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Statistics

Financial Engineering

Mathematical Planning

40. A corporation or trust that specializes in putting funds in financial securities is known as an ______________________.
*

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Insurance Company

Brokerage

Investment Company

41. The total assets minus the total liabilities of an investment business equals the company's _____________________________.
*

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Capital

Return on Debt

Net Asset Value

42. A registered investment corporation that purchases and holds a largely fixed portfolio of stocks, bonds, or other securities is known as a _____________________.
*

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Investment Company

Commingled Funds Company

Unit Investment Trust

43. The term ______________ refers to investments and redemptions being possible at all times.
*

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Close ended funds

Open ended funds

Liquid Assets

44. Which is not an example of a Real Estate Investment Trust? *

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Equity Trust

Motgage Trust

Debt Trust

45. This contains the management fees, transaction fees, and other fees related to an investment.
*

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Fee Structure

Service Fee

Management Fee
46. Consider the following figures:
*
Nominal Interest Rate: 19%

Inflation Rate: 12%

Compute for the real interest rate.

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.70%

.07%

7%

47. Consider the following figures:

*
Nominal Interest Rate: 38%

Real Interest Rate: 13%

Compute for the inflation rate.

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2.5%

25%

.25%

None of the above

48. Consider the following figures:

*
* Gross income: Php. 2,100,000.00

* Total Assets, end: Php. 400,000.00

* Expenses before taxes: Php. 1,800,000.00

* Tax rate: 8%

* Risk-free rate: 12%

Compute for the Asset Return.

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69

69%

.69%

None of the above

49. Consider the following figures:

*
* Gross income: Php. 2,100,000.00

* Total Assets, end: Php. 400,000.00

* Expenses before taxes: Php. 1,810,000.00

* Tax rate: 8%

* Risk-free rate: 12%

Compute for the Market Risk Premium.

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5.47%

54.7%

.547%

None of the above

50. Consider the following figures:

*
* Gross income: Php. 4,100,000.00

* Total Assets, end: Php. 300,000.00

* Expenses before taxes: Php. 3,750,000.00

* Tax rate: 19%

* Risk-free rate: 7%

Compute for the Market Risk Premium.

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87.5%

83%

8.75%

None of the above

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