SIBUGON INTEGRATED SCHOOL

BUSINESS FINANCE
ND
2 Quarter Assessment

Name: ______________________________ Section: __________ Score: _______

Test I. Multiple Choice. Write the correct letter only.

_____ 1. Which of the following investments do not earn interest?
a. Current Account b. Savings account c. Bonds d. Time deposit
_____ 2. Which of the following is not an example of a deposit investment?
a. Savings b. Mutual funds c. Current d. Time deposit
_____ 3. The person that manages a person’s mutual fund. a. Creditor b. Bondholder c. Broker d. Stockholder
_____ 4. These payments are needed to maintain an insurance account
a. Interest b. Capital gains c. Dividends d. Premium
_____ 5. What is the income earned on a bond? a. Interest b. Premium c. Dividends d. Capital Gains
_____ 6. What do you call an owner of a company’s stocks? a. Stockholder b. Broker c. Bondholder d. Creditor
_____ 7. What is the income earned on a stock? a. Interest b. Dividend c. Premium d. Deposit
_____ 8. What is the strategy to earn short-term income from stocks?
a. Buy high sell low b. Buy low sell high c. buy high sell high d. buy low sell low
_____ 9. These are tangible assets held as investments. a. Deposits b. Stocks and bonds c. Funds d. Hard assets
_____ 10. What is the income earned on a building? a. Interest b. Dividend c. Rent d. Credit
_____ 11. Why some older people put their money in a savings account?
a. They earn a better rate if they will invest in long-term stocks b. They do not want a lot of investment risk
c. Because their parents did the same thing d. Because it helps them save money more easily
_____ 12. What does a well-designed, successful financial plan include?
a. wants and needs b. unexpected income c. retirement planning d. bank statements
_____13. We are working to achieve within a defined period __________.
a. dream b. goal c. ideal d. value
_____14. What are goals? a. remain the same year after year, throughout life. b. need to reflect current income.
c. need to be realistic, have a target date, and associated cost. d. are generally the same for middle class families.
_____15. Which one is a good example of a well-stated financial goal?
a. become financially independent. b. buy a $50,000 car.
c. buy a house. d. pay off $10,000 in credit card debt in two years.
_____16. Which of the following accounts offer highest interest rates?
a. A money market account b. A checking account c. A savings account d. A credit account
_____17. What do you call the available balance of a bank account?
a. The amount the bank allows the customer to borrow. b. The amount the bank allows the customer to use now.
c. The total amount of all the checks written. d. The total amount of all checks deposited.
_____18. What do you think is the first step in the Financial Planning Process?
a. Analyze the data b. Gather the data c. Implement the plan d. Establish the goal
_____19. We believe that money is set aside to grow ______________.
a. net income b. discretionary income c. a budget d. savings or investments
_____20. Today, Financial Planning helps individuals to ____________.
a. guarantee future income b. eliminate risk on investments
c. have strategies for saving and investing d. achieve all goals by set target dates

Test II. Identification.

Instruction. Identify the type of investment the statement describes. Write your answer on the space provided.
_______________21. A type of security that signifies ownership in a corporation and represents a claim on part of the corporation’s
assets and earning.
_______________22. Debt investments where an investor loans money to an entity which borrows the funds for a defined period of
time at a variable or commonly, fixed interest rate.
_______________23. A common type of investment in which your money is placed into a banking institution for safekeeping.
_______________24. A type of bank deposit that earn the highest interest rate. It is not always available for withdrawal. It is
evidenced by a certificate of deposit which can be bought or sold by the depositor themselves.
_______________25. A type of bank deposit that earns interest but not that significant, but the most common type of deposits.
_______________26. An investment that is made up of a pool of funds collected from many investors for the purposes of investing
in stocks, bonds, and similar assets.
_______________27. Generally accepted form of money, including coins and paper notes, which is issued by government and
circulated within an economy.
_______________28. Land and any improvements on it such as land, house and lot, and condominiums.
_______________29. A basic good used in commerce that is interchangeable with other commodities of the same type.
_______________30. A contract (policy) in which an individual or entity receives financial protection or reimbursement against
losses from an insurance company.

Test III. True or False

On the space provided, write TRUE if the idea being expressed is correct and FALSE if otherwise.
________ 31. Investments generally earn passive income. ________ 32. Time deposit accounts do not earn interest.
________ 33. Banks issue bank statement on savings deposit accounts.
________ 34. Insurance are set up for some specific purpose at some certain time in the future.
________ 35. Mutual funds generally earn more than savings account. ________ 36. Bonds earn dividends.
________ 37. Dividends are always declared regularly ________ 38. Stocks are generally riskier than bonds.
________ 39. Real Estate investments earn rents. ________ 40. Hard assets are tangible assets.

Test III. Matching Type

Directions: Match the items in Column A with the terms in Column B. Write the CAPITAL LETTER of your answer on the space
provided.
Column A Column B
41. _____ Planning on wealth accumulation for large purchases such as house, educational A. Adequate
expenses, investments for retirement, etc. Protection
42. _____ Financial products will be proposed. At this point, the individual can comment on the B. Data Analysis
solutions proposed.
43. _____ Periodic review of the financial plan to evaluate changing market conditions (i.e. C. Data Gathering
economic conditions, taxes, interest rates, etc.).
44. _____ Analysis of protection needed for unforeseen risks. D. Financial Plan
Recommendation
45. _____ Management of when and how much taxes will be paid. E. Financial Position
46. _____ Understanding the cost of retirement. Analysis of cash flows to come up with investment F. Investment and
plans that will meet the costs of retirement in the future. Accumulation Goals
47. _____ Analysis of the individual’s financial position and cash flows. Review of legal papers. G. Objective Setting
Evaluation of objectives vis-à-vis the client’s resources and economic conditions.
48. _____ Quantifying monetary objectives with definite time frames. Prioritizing objectives. H. Plan Monitoring
49. _____ Using surveys, questionnaires and interviews to gather quantitative and qualitative I. Retirement
information from the individual. Planning
50. ____ Understanding of personal resources by checking an individual’s net worth and cash flow. J. Tax Planning

Case Analysis.
Directions: Read carefully, analyze each case and write your best answers on the underlined space provided.
51-55. Edison is nearing his retirement. He was able to save up to a significant amount of money and is planning to invest it to earn
something when he has already retired. After considering a lot of factors, he came down with two choices; buy stocks or construct a
building to be rented out to others as a dormitory. Which option would work best for Edison and why?
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
__________________________________________________________________________________________
____________________________________________________________________________________________________________
_____________________________________________________________________________________________________.

56-60. Girlie received P3,500 as a gift when she graduated from high school. Her parents want her to save the money for college, but
Girlie wants to buy new clothes, shoes and watch. She also needs new tires because the ones on her car are badly worn. Girlie asks
you for advice. How should she spend her graduation money?
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________________________________
____________________________________________________________________________________