1.

It is defined as the utilization of scarce resources of the organization to

maximize attainment of the organization’s goals and objectives.
a. Finance b. Management c. Budgeting d. Wealth Maximization
2. It is defined as the science and art of managing money.
b. Finance b. Management c. Budgeting d. Wealth Maximization
3. It is the act of estimating revenue and expenses over a period of time.
c. Finance b. Management c. Budgeting d. Wealth Maximization
4. It is the prompt achievement of goals and objectives.
d. Efficiency b. Effectiveness c. Productivity d. Profit Maximization
5. It is when the resources required to achieve an objective are weighed against
what is accomplished.
e. Efficiency b. Effectiveness c. Productivity d. Profit Maximization
6. It is the output-input ratio within a time period taking into consideration
quality.
a. Efficiency b. Effectiveness c. Productivity d. Profit Maximization
7. It is an association of two or more persons who agreed to contribute money,
property, or industry to a common fund with the intention of dividing the
profits among themselves.
b. Sole proprietorship b. Partnership c. Corporation d. none of
these
8. The artificial body or being organized in accordance with the provision of law in
which ownership is divided into shares of stocks.
c. Sole proprietorship b. Partnership c. Corporation d. none of
these
9. A business unit owned and controlled by single individual.
10. Most businesses raise money by selling their securities in a _________.
a. A direct placement c. a public offering
b. A stock exchange d. a private placement
11. A ___________ is a type of financial intermediary that pools savings of individuals
and makes them available to business and government users. Funds are obtained
through the sale of shares.
c. Mutual fund b. savings and loans. c. savings bank d. credit union
12. A ___________is set up so that employees of corporations or governments can
receive income after retirement
d. life insurance company c. savings bank
e. pension fund d. credit union
13. Which of the following is not a financial institution?
f. A pension fund c. a newspaper publisher
g. a commercial bank d. an insurance company
14. A ___________ is one financial intermediary handling individual savings. It
receives premium payments that are placed in loans or investments to
accumulate funds to cover future benefits.
a. Life insurance company c. savings bank
b. Commercial bank d. credit union
15. Wealth maximization as the goal of the firm implies enhancing the wealth of
c. The Board of Directors c. the federal government
d. The firm’s employees d. the firm’s stockholders
16. The primary goal of the financial manager is ___________.
e. Minimizing risk c. maximizing wealth
f. Maximizing profit d. minimizing return
17. The major securities traded in the capital markets are __________.
a. Stocks and bonds c. commercial paper and treasury bills
b. Bonds and commercial papers d. treasury bills and certificates of deposits
18. Firms that require funds from external sources can obtain them from _____.
c. Financial markets c. Financial institutions
d. Private placement d. all of the these
19. The ___________ is created by a financial relationship between suppliers and
users of short-term funds
e. Financial market. b. Money Market c. Stock Market d. Capital Market
20. These are arrangements where the owner of the property rents the property
out to the user of the property for a fixed monthly lease payment.
f. Loans b. Leases c. Mortgages d. Letters of Credit
21. The companies borrow money from banks and other lending institutions to
buy the land, building or machinery and these are used as collateral for the
loan obtained.
A. Loans b. Leases c. Mortgages d. Letters of Credit

22. The instruments are instruments or securities which are paper or

electronic evidences of either debt/bonds or equity/stock covering financial
transactions in the different markets.
a. Financial Markets b. Money Markets c. Primary Markets d. Capital Markets

23. These are instruments issued by corporations and government units to

obtain short-term funds.
A. Financial Markets b. Money Markets c. Primary Markets d. Capital Markets
24. These are institutions and systems that facilitate transactions in all types of
financial claims and bridges between those with excess funds and those who
need funds.
a. Financial Markets c. Primary Markets
b. Money Markets d. Capital Markets

25. It is the highest policy making body in a corporation.

a. Shareholders b. Board of Directors c. President d. none of
these