Professional Documents
Culture Documents
Direction: Read and understand carefully the following items and select the letter that corresponds to the correct
answer on the space provided before the number. ( 30 points )
______ 1. Financial management starts with a ______ and it is applicable to both individuals and companies.B
______ 2. A system that links the savers and the users of funds. C
______ 3. Which of the following financial intermediaries provide mechanism where savers can put their excess funds
through deposits? C
______4. It provides opportunities for big and small investors to invest in financial instruments which they would not
have considered on their own, or they may have considered but do not have the time or the expertise to do it. C
______5. It provides a system for trading of equity securities of publicly listed companies. These equity securities are
common stocks and preferred stocks. B
_____6. This is used by the Insurance Companies to fund claims like life insurance products and non-life insurance
products. A
A. equity securities and debt securities C. equity securities and common stocks
B. debt securities and common stocks D. preferred stocks and debt securities
_____8. Who is the famous personality who said that we must be aware of our little expenses? C
_____10. He provides assistance in payroll preparation and coordinate the functions of administration, finance, and
sales and marketing departments? A
_____11. Which of the following is TRUE about the responsibility of a President in a company? D
A. Assisting other department s in hiring employees C. Ensuring production meets customer demands
B. Formulating strategies and plans D. Overseeing the operations inside the companies.
______ 12. What can you do as a student to save money and expenses from your money when you go school every
day? A
A. in order to save money I will limit my little expenses every day to save my money
B. I will buy all the healthy foods in the canteen.
C. I will spend all my money in the morning and ask for more money in the afternoon.
D. I will used my credit card in school.
______ 13. The following are the responsibilities of board of directors EXCEPT ONE. Which is it? D
A. Ensuring production meets customer demands C. Directing and coordinating company sales
B. Performing market and competitor analysis D. Assisting other departments in hiring employees
_______16. The Treasury bonds and Treasury bills issued by the _________ are forms of indebtedness of the National
Government.D
_______17. It includes making decision as to how to finance long-term investments and working capital which deals with
the day-to-day operations of the company.A
A. Eat only snacks and skip heavy meals because breakfast, lunch and dinner is expensive
B. Budget your money wisely and avoid spending too much on unnecessary items
C. Borrow money from your classmate and buy your snacks at 7/11
D. Bring your food for lunch in school and spends all your remaining money on your snacks
______19. It is a business’ short term assets , such as inventory, and its short-term liabilities such as money owed to
suppliers. B
A. Shareholders is also called equity holders and considered the owners of the company while creditors are
outsiders who lend to the firm resources like assets, money and services.
B. Shareholders is also called equity holders and considered the owners of the company while creditors are
outsiders who lend to the firm resources like assets, money and services.
C. They are no differences between them
______20. They are the people who are responsible for planning, organizing, staffing, leading and controlling the
business’s effort.
_____22. The following are the roles and functions of a Financial Manager EXCEPT ONE. Which one is it? D
_____23. It focuses on decisions made by individual and institutional investors as they choose securities for their
investment portforlios.
_____25. A body of facts , principles, and theories relating to raising and using money by individuals, businesses, and
governments.
_____26. It provides financial data through income statements, statement of financial position and statement of cash
flows from which financial decisions are made.
_____27. The financial manager must know how to interpret data and used statements in allocating the business’
_______ to generate the best return possible in the long-run.
_____29. In what specific year when finance moved away from its descriptive definitional nature and became more
analytical?
_____30. In the year _____ financial practice revolved around preservation of capital, maintenance of liquidity,
reorganization of financially distressed businesses and the bankruptcy process.
__________1. What is the name of this theory that examines the relationship between the owners and the managers of
a business.
__________2. The total value of the stock in a corporation is simply equal to the value of the _________ equity.
__________3. The most common cited business goal.
__________4. Refers to the community of persons within which a firm operates. They form part of the environment of a
firm.
__________5. They are people responsible for planning, organizing, staffing and leading and controlling a business.
__________6. They are also called equity holders and considered as the owners of a company.
__________7. Their interest in a firm is for the firm to be in a position to continually service its indebtedness to them by
being profitable.
__________8. It provides a structure for decision making through risk analysis, theory through supply and demand
relationships and comparative return analysis.
__________9. On what century that finance emerge as a field separate from economics?
__________10. It is the conflict between managers and shareholders. This conflict happens because of diversified
interest between the two parties.
Direction: Read and understand carefully the questions below and answer it religiously. (20 points ).
1. If the preferred stockholders have preference over common stockholders in terms of claims over the assets of
the company and in cash dividend declaration, why would an investor be willing to become a common
stockholder? Explain.
2. Give at least 3 important reasons why the board of directors is the highest policy-making body in a corporation?
3. Explain the differences among common stocks, preferred stocks, and debt securities.