10.

What is a type of bond where the corporation pledges securities which it owns (stocks, bonds of its
subsidiaries)?
a) Mortgage bond
b) Registered bond
c) Coupon bond
d)
Collateral
trust bond
B
11. Which of the following types of bond does not have security except a promise to pay by the issuing
corporation?
a) Debenture bond
b) Registered bond
c) Coupon bond
d)
Collateral
trust bond
A
12. How do you call a type of bond issued jointly by two or more corporations?
a) Joint bond
b) Debenture bond
c) Registered bond
d)
Collateral
trust bond
A
13. This is a type of bond whose guaranty is in lieu on railroad equipment. What is this type of bond?
a) Equipment
b) Debenture bond
c) Registered bond
d) Infrastructure
bond
D
14. How do you classify a bond if the security of the said bond is a mortgage on certain specified asset of
a corporation?
a) Registered bond
b) Preferred bond
c) Incorporators bond d)
Security
bond
B
15. How do you call a type of bond where the corporations owner name is recorded and the interest is
paid periodically to the owners with their asking for it?
a) Registered bond
b) Preferred bond
c) Incorporators bond d) Bail bond
A
16. How do you call an increase in the value of a capital asset?
a) Profit
b) Capital gain
c) Capital expenditure d) Capital stock
B
17. What is the reduction in the money value of a capital asset?
a) Capital expenditure
b) Capital loss
c) Loss
d) Deficit
B
18. It is a negotiable claim issued by a bank in lieu of a term deposit. What is this?
a) Time deposit
b) Bond
c) Capital gain
d) Certificate of
deposit
D
19. How do you consider any particular raw material or primary product (e.g. cloth, wool, flour,
coffee.)?
a) Utility
b) Necessity
c) Commodity
d) Stock
B
20. It denotes the fall in the exchange rate of one currency in terms of other. The term usually applies to
floating exchange rates. How do you call this?
a) Currency appreciation
b) Currency devaluation
c) Currency float
d)
Currency
depreciation
D
21. What is the amount of companys profits that the board of directors of the corporation decides to
distribute to ordinary shareholders?
a) Dividend
b) Return
c) Share of stock
d) Par value
A

22. This is the residual value of a companys assets after all outside liabilities (shareholders excluded
have been allowed for). What is this residual value commonly called?
a) Dividend
b) Equity
c) Return
d) Par value
B
23. What do you call a document that shows proof of legal ownership of a financial security?
a) Bond
b) Bank note
c) Coupon
d) Check
B
24. What is a market condition where there are two buyers and two sellers?
a) Doupsony
b) Duopoly
c) Bilateral doupsony
d)
Bilateral
oligopoly
C
25. Which do you think is true in case of bankruptcy of a partnership?
a) The partners are not liable for the liabilities of the partnership
b) The partnership assets (excluding the partners personal assets) only will be used to pay the
liabilities
c) The partners personal assets are attached to the debt of the partnership
d) The partners may sell stock to generate additional capital
C
26. Which of the following is true about partnership?
a) It can be handed down from one generation of partners to another
b) It will be dissolved if one partner ceases to be connected with the partnership
c) It has perpetual life
d) Its capitalization must be equal for each partner.
B
27. Which of the following is true about corporations?
a) It is not best for business organization
b) The minimum number of incorporators to start a corporation is three
c) The life is dependent on the lives of the incorporators
d) The stockholders of the corporation only liable to the extent of their investments
D
28. Determine the approximate number of year if an amount of money is doubled when invested at 12%
interest per annum.
a) 4 years
b) 5 years
c) 6 years
d) 7 years
D

P 1 i F 2 P
N

Solution:

1.12 N

N ln 1.12 ln 2

ln 2
6.11 7
ln 1.12

29. If A is a periodic payment and i is interest rate, then what is the value of present worth of perpetuity?

a) Ai
D

b) A i

c)

i
A

d)

A
i