URDANETA CITY UNIVERSITY

FINANCIAL MARKETS QUIZZER

CHAPTER 1 - 17
A.Y. 2022-2023

CHAPTER 1
RATIONALE IN STUDYING FINANCIAL MARKETS AND INSTITUTIONS

Block: A015
Names:
➢ Fernandez, Celina Joy A.
➢ Poyaoan, Justine Mae M.

1. A marketplace that provides avenue for the sale and purchase of assets.

A. Financial Market
B. Financial Institutions
C. Banks

ANSWER: A. Financial Market

2. Term “Financial Markets” are also known as:

A. Bonds
B. Wall Street
C. Institutions

ANSWER: Wall Street

3. An establishment that completes and facilitates monetary transactions such as deposits,

loans, investment, and currency exchange.

A. Money Market
B. Capital
C. Financial Institutions

ANSWER: C. Financial Institutions

4. With this approach, students learn to understand economic analysis, that is, students
develop the economic intuition they need to organize concepts and facts.

A. Understanding
B. Evaluating
C. Predicting

ANSWER: A. Understanding

5. With this approach, students learn to understand economic analysis, that is, students
develop the economic intuition they need to organize concepts and facts
A. Understanding
B. Evaluating
C. Predicting

ANSWER: C. Predicting
Block: A513
Names:
➢ Gacusana, Gabriel
➢ Palisoc, Jan Kurt

1. Financial markets and institutions

a) Involve the movement of huge quantities of money.

b) Affect the profits of businesses.
c) Affect the types of goods and services produced in an economy.
d) All of the above.
e) Only A and B of the above.

ANSWER: D. All of the above

2. Financial market activities affect

a. Personal wealth.
b. Spending decisions by individuals and business firms.
c. The economy’s location in the business cycle.
d. All of the above.

ANSWER: D. All of the above

3. Markets in which funds are transferred from those who have excess funds available to
those who have a shortage of available funds are called?

a. Commodity markets.
b. Funds markets.
c. Derivative exchange markets.
d. Financial markets.

ANSWER: D. Financial markets

3. Typically, increasing interest rates

a. Discourages individuals from saving.

b. Discourages corporate investments.
c. Encourages corporate expansion.
d. Encourages corporate borrowing.
e. None of the above.

ANSWER: B. Discourages corporate investments

4. Compared to interest rates on long-term U.S government bonds, interest rates on

_________ fluctuate more and are lower on average.

a. Medium-quality corporate bonds.

b. Low-quality corporate bonds.
c. High-quality corporate bonds.
d. Three-month treasury bills.
e. None of the above.

ANSWER: D. None of the above

Block: A520
Names:
➢ Abobo, Rosemarie A.
➢ Ditoito, Rose Marie G.

1. Any place or system that provides buyers and sellers the means to trade financial
instruments, including bonds, equities, the various international currencies, and derivatives.

A. Stock Markets
B. Financial Markets
C. Bond Markets
D. Commodities Markets

ANSWER : B. FINANCIAL MARKETS

2. They play an important role in the financial system because they reduce transaction cost,
allow sharing and solve problems created by adverse relation and moral hazard.

A. Financial Institution
B. Financial Markets
C. Financial Regulation
D. Financial System

ANSWER. A. FINANCIAL INSTITUTION

3. Are those mutual fund schemes that are directly offered by the fund house or AMC. The
names of these funds are prefixed by the word direct. There is no involvement of a third party,
distributor, or agent. The investors directly deal with the AMC offering the fund.

A. Mutual fund
B. Indirect fund
C. Direct fund
D. None of the above

ANSWER. C. DIRECT FUND

4. Students learn to use economic analysis to predict likely changes in the economy and the
financial system.

A. Understanding
B. Predicting
C. Evaluating
D. All of the above

ANSWER. B. PREDICTING

5. Students learn to evaluate current developments and the financial news. Students learn to
use financial data and economic analysis to think critically about how they interpret current
events.

A. Wall street
B. Stock market
C. Currency marks
D. None of the above

ANSWER. D. NONE OF THE ABOVE

 CHAPTER 2
INTRODUCING MONEY AND INTEREST RATES

Block: A015
Names:
➢ Myra Fe L. Domingo
➢ Jovelyn G. Briones
➢ Danna M. Perin

1. All of the following are disadvantages of barter, except one

A. Large-scale transactions can be difficult

B. Hard to establish a set value on items
C. Physical goods are exchanged
D. Market needed

ANSWER: C. Physical goods are exchanged

2. It is used as currency across India and the South Pacific, they appeared in many colors and
sizes.

A. Cowrie shells
B. Athenian drachma
C. Arabic dirham
D. Byzantine coin

ANSWER: A. Cowrie shells

3. _____________ introduced coins in the Philippines when they colonized the country in
1521.

A. American Regime
B. Pre-Spanish Regime
C. Japanese Regime
D. Spanish Regime

ANSWER: D. Spanish Regime

4. It is responsible for determining the supply of money.

A. Bangko Sentral ng Pilipinas (BSP)

B. Central Bank Notes
C. Gross Domestic Income
D. Monetary policy

ANSWER: A. Bangko Sentral ng Pilipinas (BSP)

5. If the economy is at its long-run equilibrium and the BSP increases the money supply, it
will increase _______________.

A. aggregate supply
B. aggregate demand
C. speculative demand
D. equilibrium interest

ANSWER: B. aggregate demand

Block: A520
Names:
➢ Asinas, Irish Glycka A.
➢ Biason, Rana R.
➢ Espinosa, Mary Ann O.

1. In early forms of trading, it is called ___ to exchange other items of similar value agreed
upon by the negotiating parties.

A. Swapping goods
B. Barter
C. Fed
D. Digital Money

ANSWER: B BARTER

2. It is a money that is composed of bills and coins which have been printed or minted by the
national government

A. Coinage
B. Financial institutions
C. Currency
D. Barter

ANSWER: C. CURRENCY

3. What make the financial markets work?

A. Financial institutions
B. Money
C. Currency
D. All of the above

ANSWER: A. FINANCIAL INSTITUTIONS

4. It is the price paid in the money market for the use of money.

A. Rate
B. Payment system
C. Rate of interest
D. Interest

ANSWER: C. RATE OF INTEREST

5. Digital cash people used to buy goods and services.

A. Checks
B. Financial instrument
C. Bitcoin
D. E-money

ANSWER: D. E-MONEY
 CHAPTER 3
INTRODUCING THE PAYMENT SYSTEM: AN OVERVIEW

Block: A015
Names:
➢ Almira M. Escorsa
➢ Clarissa T. Lacambra

1. One of the best-known forms of e-money is the______?

A. PayPal
B.Gcash
C. Bitcoin
D. Blockchain

ANSWER: A. PayPal service

2. Blockchain and other new payment technologies are exciting and lead some commentators
to predict a ________________?

A. E-money Society
B.checks Society
C. Fiat money Society
D. Cashless Society

ANSWER: D. Cashless Society

3. One of the five most desirable outcomes for a payments system: _____.A Resources
devoted to processing paper checks or other aspects of processing payments are diverted
from producing other goods and services. Increasing ________.

A. Effectives
B. Effeciency
C.Smooth International Transaction
D .Speed

ANSWER. B. Efficiency

4. The increasing amount of business that takes place across borders can be facilitated if
payments can be made quickly and conveniently.

A. International Smooth Transaction

B. National smooth transaction
C. Smooth international transactions
D. Smooths International Transaction

ANSWER: C. Smooth International Transactions

5. Refers to a good used as money that has value independent of its use as money.

A. E-money
B. Commodity money
C. Fiat money
D.checks

ANSWER B. Commodity money

Block: A513
Names:
➢ Bautista, Christine G.
➢ Tebangin, Trichia Mae B.

1. Mechanism for conducting such transactions

A. Money
B. Commodity money
C. Payments System
D. Money Fiat

2. Episodes in which criminals have hacked into retail credit card systems and other parts of
the payments system have raised concerns about security. Better security increases
consumers’ and businesses’ confidence that funds will not be stolen electronically.

A. Effective collaboration among participants in the system.

B. Efficiency.
C. Security
D. Speed.

3. Resources devoted to processing paper checks or other aspects of processing payments are
diverted from producing other goods and services. Increasing the efficiency of the payments
system allows it to function using fewer workers and computers, or other capital, which
benefits the economy.

A. Speed.
B. Effective collaboration among participants in the system.
C. Efficiency.
D. Security.

4. A technical device that stores money electronically and can be extensively used to sen
payments to recipients other than the e-money issuer.

A. Bitcoin
B. Blockchain
C. E-Money
D. PayPal

5. essentially a digital ledger of transactions that is duplicated and distributed across the
entire network of computer systems on the blockchain.

A. Bitcoin
B. E-Money
C. Blockchain
D. PayPal

Block: A520
Names:
➢ Veronica Eranes
➢ Marianne Joyce Nierva

1. A_________ provides the means for transferring money between banks and other
institutions to meet payment commitments resulting from financial and commercial
transactions throughout the whole economy.
A. Payments System
B. Financial Markets
C. Financial System
D. Money Markets

ANSWER: A PAYMENTS SYSTEM

2. Which of the following is (are) true about true definition of Commodity Money and Fiat
Money?

I. A commodity currency is a type of money that, like gold and silver, is valuable in and of
itself. A sort of currency known as "fiat money" is one that has been legalized by
a government but has no inherent or fixed value.
II. Paper money that is distributed by the American government is known as commodity
money. Cavemen who use fiat money exchange cows for stone tools.
III. Money that had worth because it was made of a valuable substance is referred to as
commodity money. The dollar bills and coins we currently use are referred to as Fiat
Money.
IV. A commodity currency is a type of money that, unlike precious metals like
gold and silver, has no intrinsic worth. A currency that is legal tender but has an intrinsic or
set value is referred to as fiat money.

A. I only
B. I and III.
C. III and IV
D. I, II, III, and IV.

ANSWER: B. I and III.

3. The ______________ is the transaction that a customer can initiate with their mobile
phone or other smart device using near field communication or a Qr code to pay for goods
and/ or services.

A. Debit Cards
B. Bitcoin
C. Automated Clearing House
D. Proximity mobile payment

ANSWER: D. PROXIMITY MOBILE PAYMENT

4. It is a distributed ledger, or an online network that registers ownerships of funds, securities

or any other goods.

A. Electronic money
B. Blockchain
C. Bitcoin
D. ATMs

ANSWER: B. BLOCKCHAIN

5. What are the five (5) most desirable outcomes for payments system?

A. Effective, Efficient, Security, Speed, Smooth international transactions

B. Security, Relevance, Smooth international transactions, Effective collaboration among
participants in the system, Speed
C. Security, Efficiency, Speed, Smooth international transactions, Effective collaboration
among participants in the system
ANSWER: C. Security, Efficiency, Speed, Smooth international transactions, Effective
collaboration among participants in the system

CHAPTER 4
FINANCIAL INSTRUMENTS

Block: A015
Names:
➢ BEVERLY A. ABAD
➢ MA.KATRINA A. CENTINO

1. Contract that gives rise to a financial asset of one entity and a financial liability or equity
instrument of another entity.

A. Financial Institution
B. Financial Statements
C. Financial Instrument
D. All of the above

ANSWER: C. Financial Instrument

2. It refers to an agreement between two or more parties

A. Contract
B. Financial Instrument
C. Both a and b
D. None of the above

ANSWER: A. Contract

3. A Financial Asset is any asset except

A. Accounts Receivables
B. Cash
C. Short-term debt
D. Investment in Ordinary Shares of a corporation

ANSWER: C. Short-term Debt

4. Financial instrument that derives their value on contractually required cash flows
from some other security or index.

A. Equity Instruments
B. Financial Asset
C. Derivatives
D. Financial Liability

ANSWER: C. Derivatives

5.These are examples of derivatives except:

A. Forward Contract
B. Preference Shares
C. Call options
D. Interest rate swaps

ANSWER:B . Preference Shares

Block: A513
Names:
➢ Magno, Mary Jane S.
➢ Malabanan, Arjin Ryanne A.

1. A contract that evidence a residual interest in the assets of an entity after deducting all of
its liabilities.

A. Equity Instrument
B. Future Contracts
C. Forward Contracts
D. Call Options

ANSWER: A. Equity Instrument

2. It is an agreement between a seller and a buyer that requires that seller to deliver a
particular commodity at a designated future date, at a predetermined price.

A. Interest Rate Swaps

B. Futures Contracts
C. Forward Contracts
D. Call Options

ANSWER: B. Futures Contracts

3. These are the few common examples of derivatives, except.

A. Futures Contracts
B. Forward Contracts
C. Interest Rate Swaps
D. Ordinary Shares

ANSWER: D. Ordinary Shares

4. This include primary instruments and financial derivative instruments.

A. Derivatives
B. Contract
C. Financial Instruments
D. Equity Instruments

ANSWER: C. Financial Instruments

4. It is any contract that gives rise to a financial asset of one entity and a financial liability or
equity instrument of another entity.

A. Equity Instrument
B. Financial Instrument
C. Financial Asset
D. Derivatives

ANSWER: B. Financial Instrument

Block: A520
Names:
➢ DUYAG, HERLIE S.
➢ PADILLA,MARGIEVIC C.

1. What is a financial instrument?

A. A firm policy that gives rise to a financial asset of one entity and a financial liability or
equity
instrument of another entity
B. A contract that results in a financial asset of one entity and a liability instrument of
another
entity.
C. A contract that gives rise to a financial liability or equity instrument of one entity and a
financial
asset of another entity.
D. A contract that gives rise to equity instruments of two entities.

2. Redeemable preference shares should be classified (from the issuing company’s point of
view as:

A. A financial asset
B. An equity instrument
C. A financial liability
D. A compound financial instrument

3. A Financial instrument is

A. A type of liability
B. A type of contract
C. A type of asset
D. A type of asset and liability

4. Which of the following is not a financial asset?

A. Cash.
B. Accounts payables.
C. A forward with a positive value
D. An option to sell shares of an entity.

5. Credit risk is the risk that:

A. The fair value of a financial asset or liability will fluctuate because of changes in interest
rates
B. The fair value of a financial asset or liability will fluctuate because of changes in
exchange rates
C. An entity will encounter difficulty in meeting its obligations associated with financial
liabilities
D. One party to a financial instrument will cause a financial loss for the other party by failing
to discharge an obligation.
 CHAPTER 5
OVERVIEW OF THE FINANCIAL SYSTEM

Block: A015
Names:
➢ Ma. Lenneth Cagawan
➢ Shyra Nicole Mendoza

1. It describes the situation in which one party to an economic transaction has better
information than does the other party.

A. Adverse Selection
B. Asymmetric Information
C. Moral Hazard
D. Risk Sharing

2. What is the third service of the financial system?

A. Liquidity
B. Information
C. Risk Sharing
D. Diversification

3. What are the two problems arising from asymmetric information?

A. Financial Instruments and Financial Markets

B. Transaction Cost and Information Cost
C. Adverse Selection and Moral Hazard

3. The financial system provide this by allowing savers to hold many assets.

A. Information
B. Liquidity
C. Risk sharing
D. Transaction Cost

5. This splitting of wealth into many assets to reduce risk is known as?

A. Diversification
B. Liquidity
C. Information
D. Risk Sharing

Block: A513
Names:
➢ Katherin J. Bayaca
➢ Pvea Dana L. Vito Cruz

1. Which of the following can be described as involving direct finance?

A. A corporation’s stock is traded in an over-the-counter market

B. People buy shares in mutual fund
C. A pension fund manager buys commercial paper in the secondary market
D. None of the above

ANSWER: C. A pension fund manager buys commercial paper in the secondary market

2. Intermediaries who are agents of investors and match buyers with sellers of securities.

A. Investment bankers
B. Traders
C. Dealers
D. Brokers

ANSWER: D. Brokers

3. When the lender and borrower have different amount of information regarding a
transaction, ________ is said to exist.

A. Asymmetric Information
B. Adverse selection
C. Moral hazard
D. Fraud

ANSWER: A. Asymmetric Information

4. When the potential of borrowers who are the most likely to default are the ones most
active seeking loan, ________ is said to exist.

A. Asymmetric Information
B. Adverse selection
C. Moral Hazard
D. Fraud

ANSWER: Adverse Selection

5. Adverse selection is a problem associated with equity and debt contracts arising from

A. The lender’s relative lack of information about the borrower’s potential return and risks of
his investment activities
B. The lender’s inability to legally require sufficient collateral to cover a 100 percent loss if
the borrower defaults
C. The borrower’s lack of incentive to seek a loan for high risk investments
D. None of the above

ANSWER: A. The lender’s relative lack of information about the borrower’s potential
return and risks of his investment activities

Block: A520
Names:
➢ Aira Nonong
➢ Stephanie Romano

1. Which of the following is not a key component of Financial System?

A. Financial market
B. Financial instruments
C. Finance management
D. Financial institution
ANSWER: C. FINANCE MANAGEMENT

2. A _____ occurs when one party has more information than does the other party.

A. Symmetric Information
B. Asymmetric Information
C. Asymmetric Connection
D. Information

ANSWER: B. ASYMMETRIC INFORMATION

3. Investments that help balance one person’s savings with another person’s investment in
the economy are referred to as

A. Financial Management
B. Financial System
C. Finance
D. Financial Information System

ANSWER: B. FINANCIAL SYSTEM

4. The splitting of wealth into many assets is known as

A. Diversification
B. Separation
C. Reduction
D. Information

ANSWER: A. DIVERSIFICATION

5. They are the supplier of funds, providing funds to borrowers in exchange for promises of
repayment of even more funds in the future.

A. Borrower
B. Lender
C. Financer
D. Collector

ANSWER: B. LENDER

CHAPTER 6
THE PHILIPPINE FINANCIAL SYSTEM

Block: A015
Names:
➢ Cristine Joyce D. Valdez
➢ Jennilyn V. Agustin
➢ Joely Ciryll M. Carnate

1. A bank which caters to farmers businessmen and cottage industries in the rural areas

A. Rural bank
B. Cooperative bank
C. Saving and loans association
D. Universal bank
ANSWER: A. RURAL BANK

2. Which of the following is not a government agency that regulates financial institutions?

A. Insurance Commission
B. Bangko Senral ng Pilipinas
C. Securities and Exchange Commission
D. Bureau of Internal Revenue (BIR)

ANSWER: D. BUREAU OF INTERNAL REVENUE (BIR)

3. Which of the following is not a government bank?

A. Land Bank of the Philippines

B. Al-Amanah Islamic Investment Bank
C. Philippine National Bank
D. Development Bank of the Philippines

ANSWER: C. PHILIPPINE NATIONAL BANK

Block: A513
Names:
➢ Delmar Molina
➢ Jefanie Molina
➢ Angel Venus Guerrero

1. The following are the salient points from the Financial Stability Report, December 31,
2018, except;

A. With financial markets constantly evolving, it is not clear what past data can tell about
future conditions but Financial stability is clearly understood to reflect a well-functioning
financial market.
B. The Philippines’ central financial stability issue is that Interest rates are
rising and emerging market currencies have been depreciating versus the
USD.
C. The ASEAN region continues to outpace global growth due to the benefits
that fintech can provide to the retail market.
D. The financial stability risks of Fintech are limited but it only remains a
small portion of market activity. However, shareholders are critical to
ensure that one remains vigilant of the downside risks from the disruptive
side of fintech.

ANSWER: C. The ASEAN region continues to outpace global growth due to the benefits
that fintech can provide to the retail market.

2. The following are the current risks in the Philippine Financial System, except;

A. Re-pricing, refinancing and repayment risk (3Rs)

B. Developments in borrowings
C. Continuous demand for loans and bond markets by corporate enterprises and households
is evident in the domestic economy
D. None of the choices

ANSWER: D. None of the choices

3.Which of the following is not a sign of growth in the Domestic Market?

A. An increase of 11.3% of total resources in banking system.

B. Double increase in the total assets of the insurance industry.
C. Double-digit asset growth in Philippine financial system.
D. Growth in debt and equity securities market.

ANSWER: C. Double-digit asset growth in Philippine financial system.

4. The structure of the Philippine Financial System is divided into three namely:

A. BSP, Banking Institutions, and Private Non-bank financial institutions.

B. BSP, Private banking institutions, and Government Non-bank financial institutions.
C. BSP, Banks, and Non-bank financial institutions.
D. None of the choices

ANSWER: C. BSP, Banks, and Non-bank financial institutions.

5. To counterpart the downside risks and smooth functioning of the Philippine financial
system more stringent initiatives are being pursued by the four regulatory agencies, except;

A. BSP
B. PDCI
C. IC
D. None of the choices

ANSWER: B. PDCI

Block: A520
Names:
➢ Aquino, Erica H.
➢ Fortunado, Jocelyn G.
➢ Soriano, Sheilla May D.

1. Are private or government organizations whose assets consist primarily of claims or

incomes derived from dealing in and/ or performing services in connection with claims?

A. Financial Institutions.
B. Non financial Institutions
C. Financial System
D. Monetary Board

ANSWER: A. Financial Institutions.

2. Provides credit to small borrowers who are not qualified to obtain small loans from
financial institution. The cost of borrowing and terms of payment are generally fair.

A. Credit Unions
B. Banks
C. Pawnshop
D. Dealers

ANSWER: C. Pawnshop
3. What are the elements of financial system except one:

A. Financial Claims
B. Government Agencies
C. Laws and Policies
D. Funds.

ANSWER: D. Funds

4. Who are the members of the monetary board except one:

A. Mayor
B. 1 Governor
C. 1 member from the cabinet
D. 5 members from private sector

ANSWER: A. Mayor

5. Bangko Sentral ng Pilipinas was established on July 3, 1993 pursuant to the provisions of
the 1987 Philippine Constitution and the _____________ of 1993?

A. Executive Order No. 80, the 1996 revised

B. Republic Act No. 6848
C. New Central Bank Act.
D. The Agrarian Reforms Code

ANSWER: C. New Central Bank Act

CHAPTER 7
FINANCIAL MARKETS: AN OVERVIEW

Block: A015
Names:
➢ Ericka Mae G. Francisco
➢ Karl Greek M. Escalona
➢ John Boy L. Osorio

1. These are the meeting place for people, corporations, and institutions that either need
money or have money to lend or invest.

A. Stock Markets
B. Financial Markets
C. E-markets
D. Domestic Markets

ANSWER: B. Financial Markets

2. These are places where individual investors and corporations can trade currencies, invest
in companies, and arrange loans.

A. Stock Markets
B. Financial Markets
C. E-markets
D. Domestic Markets

ANSWER: A. Stock Markets

3. Secondary market is popularly known as ____________.

A. OTC Exchange
B. Stock Market or Exchange
C. Day Trading
D. Primary Market

ANSWER: B. Stock Market or Exchange

4. A strategy in which traders hold their share or financial asset (known as their “position”)
for just a few minutes or even seconds.

A. Bid-offer spread
B. Margin trading
C. Scalping
D. Market data

ANSWER: C. Scalping

4. When was the PSE launched its new trading system, PSE trade, which was acquired from
the New York Stock Exchange?

A. July 26, 2010

B. February 3, 1936
C. February 24, 2010
D. December 15, 2003

ANSWER: A. July 26, 2010

Block: A513
Names:
➢ Jay Bonagua
➢ Yrral Saculles
➢ Christian Alcause

1. It is also known as stock market or exchange.

A. Primary Markets
B. Secondary Markets
C. Financial Markets
D. None of the above

ANSWER: B. Secondary Markets

2. Its main purpose is to facilitate the exchange of securities between buyers and sellers, thus
providing a market place, virtual or real.

A. Primary Markets
B. Secondary Markets
C. Financial Markets
D. Stock exchange

ANSWER: D. Stock exchange

3. It is a segment of the stock markets where shares, bonds, and money market instruments
are traded using a system of computer hardware screens and telephones

A. The organized stock-exchange

B. The over-the-counter(OTC) exchange
C. Market data
D. None of the above

ANSWER: B. The over-the-counter(OTC) exchange

4. Potential Day Traders should be knowledgeable of the following, except

A. Scalping
B. Margin Trading
C. High-risk trading
D. Bid-offer spread

ANSWER: C. High-risk trading

5. It is the market where borrowers of funds for highways, education, welfare activities and
public activities.

A. Public Financial Markets

B. Corporate Financial Markets
C. Both a and b
D. None of the above

ANSWER: A. Public Financial Markets

Block: A520
Names:
➢ Gennevie N. Ablao
➢ Eddine Joyce V. Manaois
➢ Claudine Mae L. Miran

1. It is known as wel as long term capital, the financial markets provides the grease that
makes many commercial transaction possible?

A. Financial Market
B. Commercial Transaction
C. Debt and Equity Market
D. Price Setting

ANSWER: B. Commercial Transaction

2. It is populary known as Stock Market or Exchange?

A. Debt and Equity Market

B. Investing Market
C. Secondary Market
D. Primary Market

ANSWER: B. Secondary Market

3. It is a method of buying shares that involves the day trader borowing a part of some
needed from the broker who is executing the transaction?

A. Margin trading
B. Investing
C. Scalping
D. Bid- offer Spread

ANSWER: A. Margin Trading

4. It refers to a original sales of securities by governments and corporations?

A. Stock Exchange
B. Financial Market
C. Arbitrage
D. Primary Market

ANSWER: D. Primary Market

5. What are the two broad segment of the stock markets?

A. Organized Stock Exchange and Over the Counter Stage

B. Primary and Secondary Market
C. Raising Capital and Commercial Transactions
D. Arbitrage and Investing

ANSWER: A. Organized Stock Exchange and Over the Counter Stage

CHAPTER 8
MONEY MARKETS AND CAPITAL MARKETS

Block: A015
Names:
➢ Shymie B. Tiempo
➢ Maria Ayssa Gale B. Punzalan
➢ Laica S. Montefalco

1. Is similar to a post-dated check and is often used in international trade, is a promise that an
importer will be able to pay for the products.

A. Certificate of Deposit (CD)

B. Banker’s Acceptance
C. Commercial Paper

ANSWER: B. Banker’s Acceptance

2. Long-term debt instruments similar to notes and loans except that bonds are usually
offered to the public and sold to many investors.

A. Bonds
B. Ordinary (Common) Equity Shares
C. Preffered Shares

ANSWER: A. Bonds
3. Class of equity share that has preference over ordinary(common) equity shares in the
payment of dividends and in the distribution of corporate assets in the events of liquidation.

A. Ordinary (Common) Equity Shares

B. Preferred Shares
C. Repurchase Agreements (Repos)

ANSWER: B. Preferred Shares

4. A financial market in which longer-term debt (original maturity of one year or greater) and
equity instruments are traded.

A. Money Market Fund

B. Capital Markets
C.Money Market Account

ANSWER: B. Capital Markets

4. It deals in new issues of securities issued by new companies or further issues by existing
companies (Public listing).

A. Money Market
B. Primary Market
C.Secondary Market

ANSWER: B. Primary Market

Block: A513
Names:
➢ Angelica Antimano
➢ Unick Nastor
➢ Erwin Jay Saure Jr

1. Capital market trading occurs in either the ________ or the ________.

A. Financial market; Financial institutions

B. Primary market; Secondary market
C. Financial market; Secondary market
D. Local market; Global market

ANSWER: B. Primary market; Secondary market

2. A ________ is the tangible evidence of debt issued by a corporation or a governmental

body and represents a loan made by investors to the issuer.

A. Bond certificate
B. Bond
C. Shares
D. Dividends

ANSWER: A. Bond certificate

3. The face value of the bond that is returned to the bondholder at maturity.

A. Face value
B. Market value
C. Carrying value
D. Par value

ANSWER: D. Par value

4. The chance that the bond issuer will not be able to make timely payments.

A. Profitability risk
B. Risk bond
C. Disaster risk
D. Credit quality risk

ANSWER: D. Credit quality risk

5. Provides an indicator of default risk that in turn affects the rate of return that must be paid
on borrowed funds.

A. Credit ratings
B. Credit limit
C. Bond
D. Credit due

ANSWER: A. Credit ratings

Block: A520
Names:
➢ Aslina Ferrer
➢ Frealin Joy M. Romatan
➢ Shaine Aizylle P. Ronquillo

1. Issues both bonds and stock to finance capital investment expenditures and fund other
investment opportunities.

A. Banks
B. Corporations
C. National and Local Government
D. Treasury Bills

ANSWER: B. Corporations

2. Each of the following are the advantages of using bonds, except.

A. Flotation costs of bonds are generally lower than those of ordinary (common) equity
shares.
B. Bondholders do not participate in extraordinary profits; the payments are limited to
interest.
C. Bondholders do not have voting rights.
D. Debt must be repaid at maturity and thus at some point involves a major cash outflow.

ANSWER: D. Debt must be repaid at maturity and thus at some point involves a major
cash outflow

3. This refers to the bond’s internal rate of return. It is the discount rate that equates the
present value of the interest and principal payments with the current market price of the bond.
A. Yield to Maturity
B. Indenture
C. Current Yield
D. Par Value

ANSWER: A. Yield to Maturity

4.It is a form of long-term equity that represents ownership interest of the firm.

A. Capital Market
B. Bond
C. Ordinary equity shares
D. Money Market

ANSWER: C. Ordinary equity shares

5. The agreement between the firm issuing the bonds and the bond trustee where presents the
bondholders. It provides the specific terms of the loan agreement, including the description
of the bonds, the rights of the bondholders, the rights of the issuing firm and the
responsibilities of the trustees.

A. Yield to Maturity
B. Indenture
C. Current Yield
D. Par Value

ANSWER: B. Indenture

CHAPTER 9
FOREIGN EXCHANGE RATES

Block: A015
Names:
➢ Jazelle B. Aquino
➢ Tricia May S. De Pablo

1. It states that exchange rate between two currencies will adjust to reflect changes in
the price level of two currencies

A. Interest Rate Parity (IRP)

B. Monetary Approach to Rate of Exchange
C. Purchasing Power or Parity
D. The Balance Payments

ANSWER: C.Purchasing Power or Parity

2. Indicates the number of units of the home currency required to buy one unit of the foreign
currency.

A. Direct Quotes
b. Indirect Quote
c. Spot Transactions
d. Forward Transactions
ANSWER: A. Direct Quotes

3. Which of this Avoidance of exchange rate risk in foreign currency markets is correct?

A. The firm may choose to maximize receivables and liability

B. A firm may seek to minimize its exchange risk by devaluation.
C. The firm may hedge its risk by purchasing or selling spot exchange contracts.
D. Maintaining a monetary balance between receivables and payables denominated in a
particular foreign currency avoids a net receivable or net liability position in the currency.

ANSWER: D. Maintaining a monetary balance between receivables and payables

denominated in a particular foreign currency avoids a net receivable or net liability
position in the currency.

4. Why are exchange rates important?

A. Because it provides a service to corporations who need to buy or sell currencies.

B. Because they affect the relative price of domestic and foreign goods.
C. Because it is a marketplace in which currencies are brought and sold purely to make profit
via revaluation.
D. All of these

ANSWER: B. Because they affect the relative price of domestic and foreign goods.

5. The process of buying and selling in more than one market to make a risk less profit.

A. Cross Rates
B. Foreign Exchange Market
C. Exchange Rates
D. Arbitrage

ANSWER: D. Arbitrage

Block: A513
Names:
➢ JACOB, RENALYN Q.
➢ NARTE, JESSICA G.

1. The practice of seeking to profit by buying in one market and selling for a higher price in
another market.

A. Arbitrage
B. Foreign
C. Exchange
D. Risk

ANSWER: A. ARBITRAGE

2. A market for converting the currency of one country into that of another country.

A. Foreign exchange risk

B. Foreign Currency
C. Exchange Rate
D. Foreign exchange market
ANSWER: D. FOREIGN EXCHANGE MARKET
3. Exchange rate at which a foreign exchange dealer converts one currency into another
currency one a particular day.

A. Exchange Market
B. Forward Exchange Rate
C. Spot Exchange Rate
D. Cross rate

ANSWER: C. SPOT EXCHANGE RATE

4. Exchange rate governing a transaction in which two parties agree to exchange currency
and execute the deal at some particular date in the future.

A. Forward Exchange Rate

B. Spot Exchange Rate
C. Interest Rate
D. Inflation

ANSWER: A. FORWARD EXCHANGE RATE

5. The risk that cash flows will vary as the actual amount of U.S. dollars received on a
foreign investment changes due to a change in foreign exchange rates.

A. Government Intervention
B. Foreign Exchange Risk
C. Direct Quote
D. Indirect Quote

ANSWER: B. FOREIGN EXCHANGE RISK

Block: A520
Names:
➢ Jhomel A. Villamar
➢ Angel M. Ibañez

1. One of the most prominent theories of how exchange rates are determined is the
____________________?

A. theory of Purchasing Power Priority

B. theory of Purchasing Power Poverty
C. theory of Purchasing Power Parity
D. theory of Purchasing Power Property

ANSWER: C. theory of Purchasing Power Parity

2. In the spot exchange market, the quoted exchange rate is typically called a
____________________?

A. Direct Quote
B. Indirect Quote
C. Direct Rates
D. Indirect Rates

ANSWER: A. Direct Quote

3. An __________________ indicates the number of units of foreign currency that can be
bought for one unit of the home currency.

A. Direct Rates
B. Indirect Rates
C. Direct Quote
D. Indirect Quote

ANSWER: D. Indirect Quote

4.An ____________________ is simply the price of one country’s currency expressed in

terms of another country’s currency.

A. Exchange Quote
B. Exchange Rates
C. Extreme Rates
D. Extreme Quote

ANSWER: B. Exchange Rates

5.If interest returns in a particular country are higher relative to other countries, individuals
and companies will be enticed to invest in that country’s currency.

A. Interested Quote
B. Interested Rates
C. Interest Rates
D. Interest Quote

ANSWER: C. Interest Rates

CHAPTER 10
MORTGAGE MARKETS AND DERIVATIVES

Block: A015
Names:
➢ JESSECA MONDALA
➢ KAYE ANN SOLOMON

1. Is the type of loan used to purchase or maintain a home, land, and other real estate, secured
by the property itself.

A. MORTGAGE
B. LONG TERMS
C. INSURED MORTGAGES
D. SECOND MORTGAGE

2. Are financial instruments that ‘’ derive’’ their value on contractually required cash flows
form some other security or index.

A. DERIVATIVES
B. FORWARD CONTRACTS
C. OPTIONS
D. INTEREST RATE SWAPS
3. To obtain a mortgage loan, the lender also requires the borrower to make a down payment
on the property, that is, to pay a portion of the purchase price.

A. DOWN PAYMENT
B. SECURITIZATION
C. LOAN TERM
D. COLLATERAL

4. It is the one of the characteristics of the residential mortgage that give discounts points (or
simply points) are interest payments made at the beginning of a loan.

A. NUMBER OF DISCOUNT PIONTS PAID

B. MORTGAGE INTEREST RATES
C. CONVENTIONAL MORTGAGE
D. FUTURE CONTRACTS

5.This is the process of transforming illiquid financial assets into market instruments.

A. SECURITIZATION
B. MORTGAGE PASS THROUGH
C. MORTGAGE- BACKED SECURITY
D. CONVENTIONAL MORTGAGE

Block: A513
Names:
➢ Castillo, Jessa M.
➢ Fernandez, Maricar C.
➢ Jacob, Christine P.

1. There are contracts to exchange cash flows as of a specified date or a series of specified
dates based on a notional amount and fixed and floating rates.

A. Foreign Currency Futures

B. Interest rate swaps
C. Futures Contracts
D. Forward Contracts

ANSWER: B. Interest rate swaps

2. It is a security that is collateralized by a pool of mortgage loan. Securitization is the

process oftransforming liquid financial assets into marketable capital market instrument.

A. Mortgage
B. Fixed rate mortgages
C. Mortgage-backed security
D. Insured mortgage

ANSWER: C. Mortgaged-backed security

3.These are long- term loan secured by real estate. Both individuals and businesses obtain
mortgage loans to finance real estate purchases.

A. Mortgages
B. Derivatives
C. Collateral
D. Down Payment

ANSWER: A. Mortgages

4. This is an agreement between a seller and a buyer that requires that seller to deliver a
particular commodity a designated future date, a predetermined date.

A. Forward contracts
B. Options
C. Interest rate swaps
D. Future contracts

ANSWER: D. Future contracts

5. These are financial instruments that ‘derive’ their value contractually required cash flows
from other security or index.

A. Loan Terms
B. Mortgages
C. Derivatives
D. Forward contracts

ANSWER: C. Derivatives

Block: A520
Names:
➢ Maxene Gae Ambrosio
➢ Tracy Key Cachero
➢ Genneth Valdez

1. To pay a portion of the purchase price.

A. Down Payment
B. Collateral
C. Loan Term
D. Private Mortgage insurance

ANSWER: A. Down Payment

2. Mortgage-backed security is also known as?

A. Derivative
B. Securitized Mortgage
C. Mortgages
D. None of the above

ANSWER: B. Securitized Mortgage

3. The most common type of mortgage-backed security

A. Mortgage backed-security
B. Securitized Mortgage
C. Mortgage pass through
D. None of the above

ANSWER: C. Mortgage pass through

4. Are commonly used by investors to spread risk and/or to speculate

A. Mortgages
B. Derivatives
C. Mortgage pass through
D. None of the above

ANSWER: B. Derivatives

5. Is an agreement between a seller and a buyer that requires that seller to deliver a
particular commodity at a designated future date, at a predetermined price.

A. Futures Contract
B. Forward Contract
C. Options
D. Interest rate swaps

ANSWER: A. Futures Contract

CHAPTER 11
INTERNATIONALIZATION OF FINANCIAL MARKETS

Block: A015
Names:
➢ Anna Marie Abalos
➢ Jasmine Rose Rapisora

1. It changes in demography and working patterns have made pay-as-you-go schemes.

A. Pensions
B. Rush Environment
C. Lower Inflation
D. Mutual Funds

ANSWER: A. Pensions

2. The New York Stock Exchange (NYSE) is the largest in the world (market capitalization
the market value of its outstanding shares: _____________followed by the NASDAQ, which
is also based in New York, ($5.63 trillion).

A. $12.14 trillion
B. $13.14 trillion
C. $14.14 trillion
D. $15.14 trillion

ANSWER: C. $14.14 trillion

3. There are three major types of international credit which of the choices is not belong ?

A. Eurocredits
B. Eurobond Market
C. Foreign Bond Market
D. Capital Market

ANSWER: D. Capital Market

4. Is an international bond underwritten by an international syndicate of banks and sold to
investors in countries other than the one in whose money unit the bond is denominated.

A. Eurocredits
B. Eurobond Market
C. Foreign bond Market
D. None

ANSWER: B. Eurobond Market

5. China has three stock exchanges, which are correct?

A. Shanghai Stock exchange, Shenzen Stock Exchange & Stock Exchange of Hong
Kong
B. Shanghai Stock exchange, Shenzen Stock Exchange & China Stock Exchange
C. Shanghai Stock exchange, Shenzhen Stock Group & Stock Exchange of Hong Kong
D. Shanghai Stock Group, Shenzhen Stock Exchange & Stock Exchange of Hong Kong

ANSWER: A. Shanghai Stock exchange, Shenzen Stock Exchange & Stock

Exchange of Hong Kong

Block: A513
Names:
➢ Dianna Faye Cabungcal
➢ Jiely-an Ebreo
➢ Ma. Alexis Escobar

1. What is the market for floating-rate bank loans whose rates are tied to LIBOR or the
London Interbank offer rate?

A. Eurocurrency
B. Eurocredits
C. World Stock Markets
D. Cross Border Measure

ANSWER: B. Eurocredits

2. What is considered as the most important type of institutional investor, owning of one-
third of all financial asset owned by institution?

A. Insurance Companies
B. Foreign Bond Markets
C. Eurocredits
D. Eurobonds

ANSWER: A. Insurance Companies

3. Refers to the process of providing funding for business activities that occur outside a
country’s borders.

A. International Bonds
B. Eurobonds
C. Eurocurrency
D. Cross-Border Financing

ANSWER: D. Cross-Border Financing

4. What is the rate at which prices for goods and services rise?

A. Inflation
B. The Investor
C. Pension
D. Risk Management

ANSWER: A.Inflation

5. Which of the following is included in financial world markets?

A. US, Japan, Philippines

B. China, UK, Nepal
C. Germany, UK, European Union
D. Canada, Thailand, Korea

ANSWER: C. Germany, UK, European Union

Block: A520
Names:
➢ Boladas, Rhea T.
➢ Domingo, Mary Grece A.
➢ Gamay, Camille Jade C.

1. This is a Factor Affecting the long-run trends of increasing activity in the financial markets.

A. Deflation
B. Lower Inflation
C. Commodity
D. Funds

ANSWER: B. Lower Inflation

2. The assets of institutional investors based in the, ________ member countries of the
OECD.

A. 32
B. 31
C. 34
D. 33

ANSWER: C. 34

3. It is international bond unwritten by an international syndicate of banks.

A. Eurobond Market
B. Foreign Bond Market
C. Eurocredits
D. Market

ANSWER: A. Eurobond Market

4. An institutional investor that are able to employ aggressive investment strategies.

A. Mutual Funds
B. Insurance Companies
C. Pension Funds
D. Hedge Funds

ANSWER: D. Hedge Funds

5. The International bond market are known as?

A. Perpetual Bonds
B. Foreign Bonds
C. Corporate Bonds
D. U.S Treasury Bonds

ANSWER: B. Foreign Bonds

CHAPTER 12
FINANCIAL INSTITUTIONS AMD INTERMEDIARIES

Block: A015
Names:
➢ KATE MARIE ANNE D. NARCISO
➢ CRESELDA D. ISIDRO SUBJECT CODE

1. Financial Institution is?

A. A key role in the financial system by taking in deposits from households and firms and
investing most of those deposits.
B. have traditionally saved individual savers and residential and commercial mortgage
borrowers, accumulate funds of many small savers and then lend this money to home buyers
and other type of borrowers.
C. A company engaged in the business of dealing with financial and monetary transactions
such as deposits, loans, investments, and currency exchange.
D. All of the choices

ANSWER: C. A company engaged in the business of dealing with financial and monetary
transactions such as deposits, loans, investments, and currency exchange.

2. Which statement is TRUE?

Statement I. Mutual Funds allow savers to purchase shares in portfolio of financial assets,
including stocks, bonds, mortgages, and money market securities.
Statement II. Finance Companies are bank financial intermediaries that raise funds through
sales of commercial paper and other securities and use the funds to make small loans to
households and firms.

A. Statement I is TRUE
B. Statement II is TRUE
C. Both statement are TRUE
D. Both statement are FALSE

ANSWER: A. Statement I is TRUE

3. It provides a large array of services including those of commercial banks and investment
banks.

A. Commercial Banks
B. Union Banks
C. Producer Banks
D. Universal Banks

ANSWER: D. Universal Banks

4. A __________ is a financial firm, such as a bank, that borrows funds from savers and
lends them to borrowers.

A. Financial Statement
B. Financial Intermediaries
C. Financial Report
D. Financial Problem

ANSWER: B. Financial Intermediaries

5.__________ is a financial intermediary that invests contributions of workers and firms in

stocks, bonds, and mortgages to provide pension benefit payments during worker’s
retirements.

A. Mutual Funds
B. Pension Funds
C. Hedge Funds
D. Stock Funds

ANSWER:B . Pension Funds

Block: A513
Names:
➢ Maria Theresa Lumiguen
➢ Clarissa Apostol
➢ Rosemarie Perez

1. It is considered the most important Intermediaries as it plays a key role in the financial
system.

A. Investment Banks
B. Commercial Banks
C. Insurance Companies
D. Mutual Funds

ANSWER: B. Commercial Banks

2. It is a financial firm, such as bank, that borrows funds from savers and lends them to
borrowers.

A. Financial Market
B. Financial System
C. Credit Union
D. Financial Intermediary

ANSWER: D. Financial Intermediary

3. It invests contributions of workers and firms in stocks, bonds and mortgages to provide
benefit payment during workers' retirement.

A. Pension Funds
B. Defined Contribution Plan
C. Hedge Funds
D. Defined Benefit Plan

ANSWER: A. Pension Funds

4. A mutual funds is called ______ as it charges buyers a commission to both buy and sell
shares.

A. No-load Funds
B. Open-end Mutual Funds
C. Closed-end Mutual Funds
D. Load Funds

ANSWER: D. Load Funds

5. It plays a significant role in financial system as it able to mobilize large amounts of money
and leverage the money when buying securities.

A. Finance Companies
B. Mutual Funds
C. Hedge Funds
D. Money Market Mutual Funds

ANSWER: C. Hedge Funds

Block: A520
Names:
➢ Aira Gayle R. Barbo
➢ May-Ann V. Dispo
➢ Nikki R. Ducusin

1. It is a company engaged in the business of dealing with financial and monetary

transactions such as deposits, loans, investments. and currency exchange.

A. Financial Markets
B. Financial Institution
C. Financial Intermediaries
D. Financial System

ANSWER: B. Financial Institutions

2. These are financial firms organized as a partnership of wealthy investors that make
relatively high risk, speculative investments.

A. Investment Banks
B. Mutual Funds
C. Hedge Funds
D. Pension Funds

ANSWER: C. Hedge Funds

3. This mutual fund issues a fixed number of nonredeemable shares, which investors may
then rode in over-the counter markets just as stocks are traded.

A. Closed-end mutual funds

B. Open-end mutual funds
C. Inside-end mutual funds
D. Outside-end mutual funds

ANSWER: A. Closed-end mutual funds

4. These companies are affiliated with department stores and companies that manufacture
and sell high-priced goods.

A. Consumer finance companies

B. Finance companies
C. Business finance companies
D. Sales finance companies

ANSWER: D. Sales Finace Companies

5. These are financial intermediaries that receive payments from individual as a result of a
contract and uses the funds to make investments.

A. Depository Institutions
B. Contractual Savings Institutions
C. Investment Intermediaries
D. Money Market Mutual Funds

ANSWER: B. Contractual Savings Institutions

CHAPTER 13
BASIC OF COMMERCIAL BANKING

Block: A015
Names:
➢ Carino, Rheshiezel T.
➢ Perez, Christer Millan G.
➢ Subong, Meagan Joy A.

1. It is a financial institution that grants loans, accepts deposits, and offers basic financial
products such as savings accounts and certificates of deposit to individuals and businesses.

A. Investment Banking
B. Retail Banking
C. Commercial Banking
D. Cooperative Banking

ANSWER: C. Commercial Banking

2. All of the following are included in the most important bank assets, except;

A. Reserves and other cash assets

B. Loans Receivable
C. Securities
D. Savings Deposit

ANSWER: D. Savings Deposit

3. It is a deposit that cannot be withdrawn or transferred to third parties using some means of
instruction.

A. Nondemand Deposits
B. Savings Deposits
C. Demand or Current Account Deposits
D. Borrowings

ANSWER: A. Nondemand Deposits

4. Banks try to accomplish these objectives by using the following strategy; except

A. Banks’ heavy dependence on demand deposits as sources of bank funds.

B. Banks try to find borrower who will pay high interest rates and will most likely settle their
loans on time.
C. Banks manage the liquidity of the assets so that its reserve requirements can be met
without incurring huge costs.
D. Banks try to purchase securities with high returns and low risk.

ANSWER: A. Banks’ heavy dependence on demand deposits as sources of bank funds.

5. It is the bank’s total profit earned per peso of assets.

A. Return of Investment
B. Return on Assets
C. Return on Equity
D. None of the above

ANSWER: B. Return on Assets

Block: A513
Names:
➢ Borbano, Via S.
➢ Guzman, Angelica P.
➢ Libatique, May S.

1. Which of the following are incorrect, except;

A. In determining the amount of bank capital, managers must not decide how much of the
increased safety that covers with higher capital (the benefit) they are wiling to trade off
against lower return on asset that comes with higher capital (the cost)
B. Banks manage the amount of capital they hold to prevent bank failure and to meet bank
capital requirements set by the regulatory authorities
C. They do not want to hod too much asset because by so doing, they will lower the returns
to equity holders

ANSWER: B. Banks manage the amount of capital they hold to prevent bank failure and
to meet bank capital requirements set by the regulatory authorities

2. What are the primary liabilities of a commercial bank?

A. Demand or Current Account Deposits, Credit Risk, Interest rate risk

B. Borrowings, Interest rate risk, Nondemand Deposits
C. Demand or current Account Deposits, Nondemand Deposits, Borrowings

ANSWER: C. Demand or current Account Deposits, Nondemand Deposits, Borrowings

3. Banks are allowed to hold securities issued by the government?

A. Marketable Securities
B. Commercial Banks
C. Credit Risk

ANSWER: A. Marketable Securities

4. What are the three basic types of risk that banks fare?

A. Liquidity Risk, Borrowings, Interest rate risk

B. Liquidity Risk, Credit Risk, Interest rate risk
C. Liquidity Risk, Loans, Interest rate risk

ANSWER: B. Liquidity Risk, Credit Risk, Interest Rate Risk

5. It is the possibility that a bank may not be able to meet its cash needs by sling assets or
raisin funds at a reasonable cost

A. Liquidity risk
B. Collateral
C. Credit-risk analysis

ANSWER: A. Liquidity Risk

Block: A520
Names:
➢ Ramos, Lyca Mae J.
➢ Delovino, Divine Rose A.
➢ Ronquillo, Melvin D.

1. It is also called shareholders’ equity, it is the difference between the value of the bank’s
assets and the value of its liabilities.

A. Commercial bank
B. Marketable Securities
C. Bank capital
D. Loans Receivable

ANSWER: C. Bank Capital

2. The possibility that a bank may not be able to meet its cash needs by selling assets or
raising funds at a reasonable cost.

A. Credit Risk
B. Liquidity Risk
C. Fixed Rate
D. Variable Rate

ANSWER: B. Liquidity Risk

3. Loans that made to households primarily to buy automobiles, furniture and other goods.

A. Consumer loans
B. Nondemand Deposits
C. Return on Assets
D. Loans to business

ANSWER: A. Consumer Loans

4. A liquid assets that banks trade to financial market.

A. Consumer Loans
B. Borrowings
C. Other Assets
D. Marketable Securities

ANSWER: D. Marketable Securities

5. The difference between the interest it receives on its securities and loans and the interest it
pays on deposits and debt, divided by the total value of its earning assets.

A. After-tax profit
B. Bank assets
C. Net Interest Margin
D. None of the above

ANSWER: C. Net Interest Margin

CHAPTER 14
EXPANDING THE BOUNDARIES OF BANKING

Block: A015
Names:
➢ Jenelyn C. Biala
➢ Liberty Gem A. Atienza

1. ______ offer distinct financial services, dealing with larger and more complicated
financial deals that retail banks?

ANSWER: Investment Banks

2. _______ are the major, international investment banking firms with easily recognizable
names such as Goldman Sacks, Deutsche Banks, Credit Suisse Group AG, Morgan Stanley
and Bank of America?

ANSWER: Bulge Bracket Banks

3. ________ occupies the middle position between smaller regional investment banking firms
and massive bulge bracket investment banks?

ANSWER: Middle-Market Banks

4.________ are the smallest of the investment banks, both in terms of firm size and typical
deal size?

ANSWER: Regional Boutique Banks

5. ________ are often like regional boutique in that they usually do not provide a complete
range of investment banking services and may limit their operations to handing M&A
related issues?

ANSWER: Elite Boutique Banks

Block: A513
Names:
➢ Gerry G. Dilan
➢ Mark John V. Orenia

1. All of the following are types of firms engaged in investment banking, except;

A. Bulge Bucket Banks

B. Cooperative Banks
C. Middle-market banks
D. Boutique Banks
2. All of the following are types of firms engaged in investment banking, except;

A. Bulge Bucket Banks

B. Cooperative Banks
C. Middle-market banks
D. Boutique Banks

3. It helps the companies take part in mergers and acquisitions, create financial products to
sell, and bring new companies to market.

A. Brokerage division
B. Primary markets
C. Corporate advising
D. Secondary markets

4. In middle-market banks, they provide the same full range of investment banking services
like;

A. Financing and asset management services

B. Trading, all types of financing, asset management services
C. Equity research and issuance
D. M&A Services

5. They usually do not provide a complete range of investment banking services and may
limit their operations to handling M&A related issues.

A. Regional Boutique Banks

B. Bulge Bucket Banks
C. Middle-market Banks
D. Elite Boutique Banks

Block: A520
Names
➢ Golingo, Marie France V.
➢ Orcine, Tanya Mae B.

1. All of the following are examples of Off-Balance Sheet except?

A. Loan Commitments
B. Bulge Bracket
C. Loan Sales
D. Trading Activities

ANSWER: B. Bulge Bracket

2. A financial intermediary that performs various services, including complex financial

transactions, underwriting, securities, facilitating mergers and other corporate organizations.
A. Bulge Bracket Banks
B. Investment Bank
C. Boutique Banks
D. Middle-Market Banks

ANSWER: B. Investment Bank

3. It is a financial contract in which bank agrees to sell the expected future returns from an
underlying bank loans to a third party.

A. Trading Activities
B. Bulge Bracket
C. Loan Commitments
D. Loan Sale

ANSWER: D. Loan Sale

4. Loan sale is also called .

A. First loan participations

B. Second loan participations
C. Third loan participations
D. Fourth loan participations

ANSWER: B. Second Loan Participations

5. Are the smallest of the investment banks.

A. Elite Boutique Banks

B. Middle-Market Banks
C. Regional Boutique Banks
D. None of the above

ANSWER: C. Regional Boutique Banks

CHAPTER 15
AN UPDATE ON THE PHILIPPINE BANKING INDUSTRY

Block: A015
Names:
➢ Daniela Kim Pagaduan
➢ Kimberly Nicer

1. What is the key anchor of growing economy?

A. CAELS
B. Financial soundness of the Philippines Banking Sector
C. Prudent regulation and risk-based supervision but of, earnest cooperation from sector
itself
D. Capital Adequacy

ANSWER: C. Prudent regulation and risk-based supervision but of, earnest cooperation
from sector itself
2. The growth of the Philippine banking system’s asset was primarily driven by the
expansion of the resources of the _____________________?

A. BSP
B. U/KBs
C. NBFIs
D. BICRA

ANSWER: B. U/KBs

3. What ultimately determines the robustness of financial institution to withstand shocks to

their balance sheets?

A. Capital adequacy
B. Financial Supervision Sector
C. Financial Soundness Indicators
D. Trust Operations

ANSWER: A. Capital Adequacy

4. What is the framework used by banking supervisors to asses the soundness of individual
institution?

A. CALES
B. CEALS
C. CAELS
D. CLEAS

ANSWER: C. CAELS

5. What is used to measure the extent to which assets are funded by the banks’ own fund?

A. Asset to capital ratio

B. Ratio capital asset
C. Capital to assets ratio
D. Capital ratio to assets

ANSWER: C. Capital to assets ratio

Block: A513
Names:
➢ RUMBAOA, TRISHA NICOLE E.

1. Its activities brought higher profitability, while maintaining adequate capitalization and
liquidity buffers to absorb potential shocks to operations.

A. Philippine economic growth

B. The Growing Economy
C. The Philippine Banking Sector
D. The Philippines Banking Sector

ANSWER: C. The Philippine Banking Sector

2.It is used by banking supervisors to assess the soundness of individual institutions.

A. CAELS Framework
B. CEALS Framework
C. CEELS Framework
D. CALES Framework

ANSWER: A. CAELS Framework

3. What are the set of indicators used to determine the current financial health and soundness
of the financial institutions in a country including their corporate and household counterparts?

A. Philippine Financial System

B. Banking System
C. Financial System
D. Financial Soundness Indicators

ANSWER: D. Financial Soundness Indicators

4. What R.A of the Bangko Sentral ng Pilipinas, has capability to promote the stability of the
financial system as required by fast evolving market landscape?

A. R.A 12111
B. R.A. 11211
C. R.A. 11121
D. R.A. 21111

ANSWER: B. R.A. 11211

5. Which of the following EXCEPT of the outlook on the banking system remains positive
given relatively.

A. Robust macroeconomic performance

B. Adequate liquidity
C. Growth was supported by the industry and services sectors
D. Rising capital buffers and opportunities presented by the growing economy and
technological innovations.

ANSWER: C. Growth was supported by the industry and services sectors

Block: A520
Names:
➢ Rica Jane Evangelista
➢ Aira May C. Palaruan

1.What is Banking Industry?

A. Financial Institution licensed to accept deposits and make loans.

B. One of the key drivers of most economies because it channels funds to borrowers with
productive investment.
C. Both A and B
D. None of the above

ANSWER: One of the key drivers of most economies because it channels funds to
borrowers with productive investment.
2. Based on the methodology introduced by the International Monetary Fund, a core set of
FSIS covering the BSP supervised institutions where’d identified. Which of the following is
not included?

A. Profitability, liquidity and sensitivity to market risk

B. Profitability and earnings
C. Capital adequacy
D. Asset quality, earnings

ANSWER: Profitability, liquidity and sensitivity to market risk

3. Philippine bank are by and large traditional (basic deposit taking and lending) with the
TLP representing how many percent of total assets as of end December 2018?

A. 59.6
B. 60.7
C. 59.8
D. 60.9

ANSWER: A. 59.6

4. It determines the robustness of financial institutions to with stand shocks to their balance
sheet.

A. Profitability
B. Sensitivity to market risk
C. Asset quality
D. Capital adequacy

ANSWER: D. Capital adequacy

5. This system showed growth in 2018. Profitability was influence by global market
conditions, primarily on policy actions by advanced economies affecting global interest rates.

A. Trust operations
B. Banking Industry
C. Foreign currency deposit unit
D. Foreigh bank branches and subsidiaries

ANSWER: C. Foreign currency deposit unit

CHAPTER 16
FINANCIAL SYSTEM REGULATORS - PART I BANGKO
SENTRAL NG PILIPINAS (BSP) AND PHILIPPINE DEPOSIT INSURANCE
CORPORATION (PDIC)

Block: A015
Names:
➢ Gracia, Rose Ann E.
➢ Callan, Cleo Rica H.

1. Examines the books of commercial banks that are members of the system, sets
reserve requirements for all banks
A. Securities and Exchange Commission (SEC)
B. Philippine Deposit Insurance Corporation (FDIC)
C. Bangko Sentral ng Pilipinas
D. Insurance Commission

ANSWER: C. Bangko Sentral ng Pilipinas

2. Provides insurance of up to, P500,000 for each depositor at a bank, examine the books of
insured banks, and imposes restriction on assets they can hold.

A. Bangko Sentral ng Pilipinas

B. Philippine Deposit Insurance Corporation (PDIC)
C. Securities and Exchange Commission (SEC)
D. Insurance Commission

ANSWER: B. Philippine Deposit Insurance Corporation (PDIC)

3. The BSP supervises banks and exercises regulatory powers over non-bank institutions
performing quasi-banking functions.

A. Financial Supervision.
B. Determination of exchange rate policy.
C. Currency issue.
D. Liquidity Management

ANSWER: A. Financial Supervision.

4. Monetary and Economics Sector is

A. responsible for the effective management of corporate strategy, communications, and

risks, as well as the BSP’s human, financial, technological, and physical resources to support
the BSP’s core functions.
B. responsible for the regulation of banks and other BSP-supervised financial institutions, as
well as the oversight and supervision of financial technology and payment systems.
C. responsible for the forecasting production, distribution, and retirement of Philippine
currency, as well as security documents, commemorative medals, and medallions.
D. responsible for the operations/activities related implementation, and assessment to
monetary policy formulation.

ANSWER: D. responsible for the operations/activities related implementation, and

assessment to monetary policy formulation.

5. Under Section 105 of RA7653, the BSP through the Monetary Board may at any time
prescribe the minimum cash margins for the opening of letters of credits depending o the
nature of transactions to be financed.

A. Open Market Operation

B. Control of the Discount and Rediscount Rates on Loans 105
C. Moral Suasion
D. Margin Requirements against Letter of Credit

ANSWER: D. Margin Requirements against Letter of Credit

Block: A513
Names:
➢ Elyzel Echavaria
➢ Julie Ann Gagahina
➢ Dianne Marie Jandoc

1. President Ramos signed into law the R.A 7653 “The New Central Bank Act”

A. July 14, 1995

B. June 15, 1993
C. June 14, 1993

ANSWER: C. June 14, 1993

2. The BSP extends discounts, loans and advancers to banking institutions for liquidity
purposes

A. Currency Issue
B. Lender of last resort
C. Financial Supervision

ANSWER: B. Lender of last resort

3. Imposing conditions or requirements on the securities or collateral against the loans

extended by bank is one of the powers of the BSP

A. Portfolio Ceiling Imposition

B. Minimum Capital Ratio
C. Control of Collaterals Required on Bank Loans

ANSWER: C. Control of Collaterals Required on Bank Loans

4. The BSP may use its persuasive power to make the banks comply or support credit
policies without direct imposition of restrictions

A. Moral Suasion
B. Open Market Operation
C. Control of Legal Bank Reserve Requirement

D. ANSWER: A. Moral Suasion

5. What are not covered by PDIC Deposit Insurance?

A. Investment products such as bonds, securities, trust accounts and other similar instruments
B. Creditors of a closed bank including depositors are required to file their claim against the
assets of a closed bank
C. Solicitation and acceptance of deposits outside bank premises, including branches without
BSP authority

ANSWER: A. Investment products such as bonds, securities, trust accounts and other
similar instruments

Block: A520
Names:
➢ Ma. Andrea B. Panida
➢ Adriann B. Castillo
➢ Stephen Dave Ranada
1. It aims to promote and preserve monetary stability and the convertibility of the national
currency.

A. Philippine Deposit Insurance Corporation (PDIC)

B. Bangko Sentral ng Pilipinas (BSP)
C. Securities and Exchange Commission (SEC)
D. Social Security System (SSS)

ANSWER: B. Bangko Sentral ng Pilipinas (BSP)

2. Creditors must file their claim within _______

A. 50 days
B. 45 days
C. 70 days
D. 60 days

ANSWER: D. 60 days

3. Is tasked to strengthen the mandatory deposit insurance coverage system to generate,

preserve, maintain faith in the country’s banking system; and protect it from illegal schemes
and machinations.

A. Securities and Exchange Commission (SEC)

B. Bangko Sentral ng Pilipinas (BSP)
C. Philippine Deposit Insurance Corporation (PDIC)
D. Financial System

ANSWER: C. Philippine Deposit Insurance Corporation (PDIC)

4. A ____is a person, bank, or other enterprise that has lent money or extended credit to
another party.

A. Debtor
B. Creditor
C. Partenership
D. Sole proprietor

ANSWER: B. Creditor

5. Who created (PDIC)?

A. The Philippine government

B. Bangko Sentral
C. Philippine Deposit Insurance Corporation
D. None of the above

ANSWER: A. The Philippine government

CHAPTER 17
“FINANCIAL SYSTEM REGULATORS – PART II”
[SECURITIES AND EXCHANGE COMMISSION (SEC) AND INSURANCE
COMMISSION (IC)]

Block: A015
Names:
➢ Hidalgo, Hazel Ivory A.
➢ Escalona, Dominique

1. A National government regulatory agency charged with supervision over the corporate
sector, the capital market participants, and the securities and investment instruments market,
and the protection of the investing public.

A. Insurance Code
B. Insurance Commission
C. Securities and Exchange Commission
D. Department of Finance

ANSWER: C. Securities and Exchange Commission

2. Insurance was introduced in the Philippines during the era of ________?

A. Pre-Hispanic
B. Laws
C. Spaniards
D. American

ANSWER: C. Spaniards

3. The Insurance Code

A. Republic Act No. 8729

B. Republic Act No. 10607
C. Republic Act No. 8799
D. Republic Act No. 1204

ANSWER: B. Republic Act No. 10607

4. Which of the following is a function of Insurance Commission?

A. Promulgation and implementation of policies, rules and regulations governing the

operations of entities engaged in insurance, pre-need, and HMO activities as well as
benevolent features.
B. Conducting insurance agent’s examinations, as well as processing of reinsurance
treaties and request for investments of insurance companies.
C. Licensing of insurance, reinsurance companies, its intermediaries, mutual benefit
associations, trusts for charitable uses, pre-need companies, pre-need
intermediaries, and HMO companies.
D. All of the Above

ANSWER: D. All of the Above

5. The following are objectives of Insurance Commission, except

A. to promote growth and financial stability of insurance, pre-need, and HMO

companies
B. To establish a sound national insurance market
C. To safeguard the rights and interest of the insuring public, pre-need and HMO
customers
D. All of the above are objectives of Insurance Commission

ANSWER: D. All of the above are objectives of Insurance Commission

Block: A513
Names:
➢ Barracas, Trixie Mae
➢ Damasen, Deverliezel
➢ Manansala, Armida

1. The Regulatory agency responsible for the supervision overall corporations, partnerships
or associations who were granted primary franchises and/or license to operate is the?

ANSWER: SEC

2. The SEC’s mission includes the following except:

A. regulation of capital market

B. Promotion of good corporate governance
C. Facilitation of access to financial product and resources.
D. Professionalization of the insurance, pre-need and HMO services.

ANSWER: D. Professionalization of the insurance, pre-need and HMO services.

3. Imposing reserve requirements on deposits received is the responsibility of the

A. SEC
B. FC
C. BSP
D. PDIC

ANSWER: C. BSP

4. The function of the BSP that relates to the regulation of discounts, loans and advances to
banking institutions for liquidity purposes is

A. Liquidity Management
B. Currency Issue
C. Lender of last resort
D. Foreign currency reserve management

ANSWER: C. Lender of last resort

5. From the date of publication of the notice of bank closure, within how many days should
depositors file their claim against the assets of the Bank

A. 90 days
B. 120 days
C. 30 days
D. 60 days

ANSWER: D. 60 days

Block: A520
Names:
➢ Alyza De Vera
➢ Jovy Anne Dasig
➢ Rosella Caragan
1. When was the Securities on Exchange Commission reorganized as mandated by R. A.
8799 also known as the Securities Regulation Code

A. December 2000
B. October 2000
C. December 2001
D. November 2001

ANSWER: A. December 2000

2. Which of the following is not an example of securities?

A. Shares of stocks, bonds, debentures, notes evidences of indebtedness, asset-backed

securities;
B. Investment contracts, certificate of interest or participation in a profit sharing agreement.
C. Fractional undivided interests in oil, gas or other mineral rights;
D. Other instruments in the past determined by the Commission

ANSWER: D. Other instruments as may in the past determined by the Commission

3. This provision under SRC states that, securities shall not be sold or offered for sale
ordistribution within the Philippines, without a registration statement duly filed with and
approved by the Commission.

A. Sec. 3.1
B. Sec 9.1
C. Sec. 8.1
D. Sec 97.1

ANSWER: C. Sec 8.1

4. A provision under SRC which states that no one shall offer, sell or enter into commodity
futures contracts except in accordance with the rules and regulations which the commission
shall prescribe.

A. Section 16. Pre-Need Plans

B. Section 11. Commodity Futures Contracts
C. Section 8.1 Requirement of Registration of Securities
D. Section 9.1 Exempt Securities

ANSWER: B. Section 11. Commodity Futures Contracts

4. Also known as the Amended Insurance Code signed by President Benigno Aquino III on
August 15, 2013.

A. Republic Act No. 10607

B. Republic Act No. 10907
C. Republic Act No. 10707
D. Republic Act No. 10670

ANSWER: A. Republic Act No. 10607

THE END