FAMI FCLP Module 1 Mock Exam PDF

NAME : CLASS : FAMI FCLP Module 1 Mock Exam...

NAME : CLASS : FAMI FCLP Module 1 Mock Exam DATE : 179 Questions 1. A group of corporations that has diversified business activities in varied industries, whereby the operators of such businesses are controlled and managed by a parent corporate entity: a) Related party b) Conglomerate c) Subsidiaries d) All of the above 2. 2. The amount paid by the stockholders in excess of the par value is called a) a. Retained earnings b) b. Capital stock c) c. Capital surplus d) d. Liabilities 3. 3. If Ana deposited P10,000.00 in a bank in a time deposit account at 4% interest in 90 days, how much will she earn? a) a. 107.50 b) b. 100.00 c) c. 400 d) d. 92 4. 4. Who elects the BOD of a corporation a) a. Common Stockholder b) b. Preferred Stockholder c) c. Bond Holders d) d. Corporate Officers 5. 5. The following are qualified investor participants except: a) a. Banks b) b. Insurance Company c) c. Investment Company d) d. An entity with total assets of more than P1B e) e. An entity with total assets of more than P1.2B 6. 7. Consider two bonds, A and B. They are both issued at the same time by the same corporate firm. They both have the same maturity, seniority, and coupon. The only difference between the two bonds is that A is callable and B is not. Which of the following will most likely best describe the relationship between A and B. a) a. Bond A will have a lower yield than b) b. Bond B will have a lower price than bond B bond A c) c. Bond A will have a higher yield than d) d. Bonds A and B will have the same bond B yield 7. 8. Which of the following reflects the performance of UITFs or Mutual Funds? a) a. Par Value b) b. Stated Value c) c. Asset Value d) d. Net Asset Value e) e. None of the Above 8. 9. All of the following are characteristics of Treasury Notes Except: a) a. They have a maximum maturity in 10 b) b. They are sold at auctions yrs c) c. They are interest bearing securities d) d. They are sold at discount 9. 10. When one sells securities with an obligation to buy them back, these are? a) a. Federal Funds b) b. Repurchase Agreements c) c. Banker’s Acceptance d) d. Commercial Paper e) e. Subordinated Notes 10. 11. Which of the following is an important characteristics of T Bills a) a. Non-negotiable b) b. Illiquid c) c. Safety of Principal d) d. Lack of secondary market e) e. None of the above 11. 12. What type of bonds do not pay interest but have yields? a) a. Income bonds b) b. Corporate bonds c) c. Below Investment Grade Bonds d) d. Zero-Coupon Bonds e) e. Sovereign Bonds 12. 13. The interest received from the Philippine Government securities are subject to? a) a. Corporate Income Tax b) b. Individual Income Tax c) c. Documentary Science Tax d) d. Final Withholding Tax e) e. Capital Gains Tax 13. 14. Which of the following are features of the Philippine Treasury Bill: a) a. 91, 182, 364 day tenors b) b. Day count is 360 c) c. Redemption at par d) d. Issued by a government owned corporations e) e. Only a, b and 14. 15. Which of the following is not a feature of FXTN a) a. Interest payment is quarterly b) b. Tenor is more than 1 yr c) c. Issued at face value d) d. Interest is calculated on 360/days e) e. None 15. 16. RTBs stand for __________________________ a) a. Republic Treasury Bills b) b. Regular Treasury Bills c) c. Retail Treasury Bills d) d. Regular Treasury Bonds e) e. Retail Treasury Bonds 16. 17. Assuming all things equal, which among the following issues would offer the highest yield to an investor? a) a. Senior Debt b) b. Unsecured Bond c) c. Subordinated Bond d) d. Government Bond e) e. Commercial Paper 17. 18. Subordinated Debt may be also known as: a) a. Senior Debt b) b. Junior Debt c) c. Public Debt d) d. None of the above 18. 19. If an investor holds a bond to maturity, they will make a capital gain if: a) a. The bond is issued at par b) b. The bond is purchased below par c) c. The bond is issued above par d) d. The bond is purchased above par 20. In a liquidation, investors get paid in which order? 19. a) a. Preferred, bond, common b) b. Preferred, common, bond c) c. Bond, Common, Preferred d) d. Bond, Preferred, Common 20. 21. The time the debt must be repaid a) a. Term b) b. Tenor c) c. Maturity date d) d. Semi-annual basis 21. 22. A bond with a coupon rate of 10% and is sold a P1000. This bond has been sold at: a) a. Par b) b. Loss c) c. Discount d) d. Premium 22. 23. Alternative to borrowing for the short term by using government securities as collateral a) a. NCD b) b. Banker’s Acceptance c) c. Repurchase Agreements d) d. Commercial Paper 23. 24. Company A has declared a P 0.75 cash dividend. If you have 6000 shares, how much money will you receive? a) a. P6000 b) b. P5000 c) c. 4500 d) d. 5500 24. 25. This is the most permanent form of business organization, where the investors may lose their entire investment but the personal assets are not at risk. a) a. Partnership b) b. Corporation c) c. Sole Proprietorship d) d. All of the above 25. 26. This is the maximum number of shares issued by a corporation multiplied by the par value a) a. Authorized capital b) b. Subscribed capital c) c. Paid-up capital d) d. Additional paid-in capital 26. 27. The following statement/s is/are true about common and preferred stocks: I. Owners of common stock have complete voting rights while preferred stockholders have only selected voting rights II. In the event of liquidation, owners of common stock are paid before preferred stockholders III. Common stockholders and preferred stockholders are entitled to the pre-emptive right IV. Preferred stockholders are senior to bondholders and common stockholder a) a. I only b) b. I and II c) c. III d) d. I, II, III 27. 28. Minority shareholders can gain representation in a BOD with this type of voting a) a. Statutory b) b. Cumulative c) c. Standard Voting d) d. All of the above 28. 29. This is referred to as the cut-off date in issuing dividends a) a. Declaration Date b) b. Record date c) c. Ex-dividend date d) d. Payment Date 29. 30. The following are debenture bonds except a) a. Convertible Debentures b) b. Subordinated Debentures c) c. Equipment Trust Certificates d) d. None of the Above 30. 31. 2% is equivalent to how many basis points? a) a. 0.2 b) b. 2 c) c. 20 d) d. 200 31. 32. These are bonds issued by a corporation sponsored owned or controlled by the government a) a. Municipal bonds b) b. General obligation bonds c) c. Agency bonds d) d. Revenue bonds 32. 33. If a corporation is to be liquidated, at what value are his shares to be valued at? a) a. Par value b) b. Current market value c) c. Book Value d) d. Stated Value 33. 34. The following are market professionals except a) a. Associated Person b) b. Salesman c) c. Government Securities Eligible Dealer d) d. Investment House Underwriters e) e. None of the above 34. 35. A qualified individual buyer is a natural person with: a) a. Minimum annual gross income of Php b) b. Total portfolio investment in SEC- 25,000,000 for at least 2 years prior to registered securities of at least Php registration 100,000,000 c) c. A personal net worth of not less than d) d. All of the above Php 300,000,000 35. 35. A qualified individual buyer is a natural person with: a) a. Minimum annual gross income of Php b) b. Total portfolio investment in SEC- 25,000,000 for at least 2 years prior to registered securities of at least Php registration 100,000,000 c) c. A personal net worth of not less than d) d. All of the above Php 300,000,000 36. 36. A qualified institutional buyer is: a) a. A natural person with minimum annual b) b. A juridical person with minimum gross income of at least P100M for at annual gross income of at least P100M least 2 years prior to registration for at least 2 years prior to registration c) c. A natural person with total portfolio d) d. A juridical person with net worth of not investment in SEC-registered securities less than Php 60,000,000 of at least P60,000,000 37. 37. A Person or entity engaged in buying and selling of Government Securities such as Treasury Bills, Treasury Notes and Treasury Bonds a) a. Investment House b) b. Investment Banks c) c. GSED d) d. Bangko Sentral ng Pilipinas 38. 38. A natural person hired to buy and sell securities on a salary or commission basis by a Broker Dealer is called a a) a. Associated Person b) b. Salesman c) c. Trader d) d. Broker 39. 39. Any person who engages on behalf of an issuer of securities in, among others, registering the transfer of such securities a) a. Exchange b) b. Clearing Agency c) c. Investment Company d) d. Transfer Agency 40. 40. Any person employed full time by the Broker Dealer whose responsibilities include internal supervision of other employees, agents, salesmen, officers, directors clerks and stockholders of such Broker Dealer for compliance with SRC and its IRR a) a. Salesman b) b. Associated Person c) c. Officer d) d. Clearing Agency 41. 41. Corporation which engages in Underwriting of Securities of another person, including securities of government or its instrumentalities a) a. Investment House b) b. Investment Company c) c. Investment Company Adviser d) d. Exchange 42. 42. The following statements are true except: a) a. The registration of a salesman or b) b. No person shall engage in the associated person shall not be business of buying or selling securities in automatically terminated upon the the Philippines as a broker or dealer, or cessation of his affiliation with the broker act as a salesman, or an associated or dealer. person of any broker or dealer unless registered as such with the Commission c) c. No registered broker or dealers shall d) d. In the case of a broker or dealer, the employ any salesman or any associated applicant must satisfy a minimum RBCA person who is not registered as such requirement as prescribed by the with the Commission. Commission, and provide a bond or other security as the Commission may prescribe to secure compliance with the provisions of this Code. 43. 43. A person applying for registration as a Broker-Dealer under Sec. 28 shall indicate in SEC Form 28-BDA (Application for Registration as Broker-Dealer) the following except: a) a. Deal with Equity Securities, Fixed b) b. Trade, directly/indirectly, in an Income/Debt Securities, Proprietary Exchange, OTC or in Alternative Trading Shares, Non-Proprietary Shares, System Government Securities, Derivatives or Other Instruments c) c. Be Solely engaged in the business of d) d. If an Exchange Trading Participant, a Broker-Dealer, unless otherwise whether Clearing or Non-Clearing authorized by the Commission to engage Trading Participant and if participant will in another business engage in market making transactions e) e. None of the above 44. 44. What is the minimum capitalization requirement for Broker Dealers? a) a. Php 100,000,000 b) b. PHp 25,000.000 c) c. Php 60,000,000 d) d. Php 50,000,000 45. 45. This is the minimum levels of capital that has to be maintained by firms which are licensed, or securing a Broker Dealer license, taking into consideration the firm size, complexity and business risk a) a. Risk Based Capital Adequacy b) b. Risk Management Requirement Ratio c) c. Risk Assessment d) d. None of the above 46. 46. Application for increase in authorized capital stock and for the registration of the securities must be filed with the SEC, within: a) a. forty five (45) days from the date of b) b. forty five (45) days from the date of the approval by the stockholders the declaration by the board of directors c) c. thirty (30) days from the date of the d) d. thirty (30) days from the date of the approval by the stockholders declaration by the board of directors 47. 48. The following statement about the requirements for qualified buyers are true except: a) a. The registration as qualified buyer b) b. Any application for renewal shall not shall be valid for 3 years if the be subject to new evaluation by the qualifications provided are continuously registrar and accompanied by updated complied with. information sheets. c) c. The registrar shall maintain a registry d) d. None of the above book of qualified buyers that shall be open for inspection by the Commission. 47. The sanction on violation of any of the provision of the rules on declaration of 48. stock dividends: a) a. Fine of no less than Php 200 and not b) b. Additional fine of not more than Php more than Php 50,000 500 for each week of continuing violation c) c. Suspension and revocation of the d) d. All of the above Certificate of Application or permit to offer securities 49. 49. Which rule by the SEC covers the registration of salesman and associated person? a) a. SEC Rule 28 b) b. SRC Rule 4 c) c. SEC Rule 4 d) d. SRC Rule 28 50. 50. The type of trading participants who buys and sells for the account of others is called: a) a. Dealing Participant b) b. Broker Participant c) c. Trading Participant d) d. Qualified Investor 51. 51. The following are Qualified buyers Except: a) a. Banks b) b. Insurance Company c) c. Investment Company d) d. A juridical person with a net worth of less than Php 100,000,000 e) e. a natural person with a minimum annual gross income of Php 25,000,000 for at least 2 years 52. 52. Who is the manager of a mutual fund? a) a. Management Company b) b. Custodian c) c. Investor d) d. Broker 53. 54. In how many days should a Broker Dealer notify the Commission about the discontinuation of employment of a salesman or associated person? a) a. No later than 5 days from the b) b. No later than 10 days from the discontinuation of employment discontinuation of employment c) c. No later than 30 days from the d) d. No later than 45 days from the discontinuation of employment discontinuation of employment 54. 55. For how many years should a Broker Dealer preserve all records required to be maintained pursuant to the Books and Records Rule from the date the Commission and/or the SRO has approved its operation to cease? a) a. Maximum of 20 years b) b. Minimum of 10 years c) c. Minimum of 5 years d) d. Maximum of 5 years 55. A person that buy and sells securities for his own account a) a. associated person b) b. salesman c) c. dealer d) d. market maker / specialist 56. The third market is also known as a) a. Exchange market b) b. Without broker intermediation c) c. OTC Trading d) d. Corporation offering 57. What is a watered share? I. Issued without consideration (bonus share) II. Issued as fully paid when the corporation has received a lesser sum of money than its par or issued value (discount share) III. Issued for a consideration other than actual cash such as property or services, the fair valuation of which is less than its par or issued value. IV. Issued as stock dividends when there are not sufficient retained earnings to justify it. a) a. I and II b) b. I, II and III c) c. I, II, IV d) d. All of the above 58. Consideration for the issuance of stock may be any of the following: I. Actual cash paid to the corporation II. Property, tangible or intangible, actually received by the corporation III. Lawyer who helped the corporation in its issuance of stock. a) a. I and II b) b. I and III c) c. II, III d) d. All of the above 59. The following does not have any coupons. I. 10-Year Bond II. Treasury Bills III. 5-Year T-Notes IV. Zero Coupon Bonds V. 30-Year Bond a) a. II only b) b. I, II, V c) c. II, IV d) d. II and III 60. Which are true about rights offering? I. Offering price of new shares are below the market price of their existing shares. II. Offering price of new shares are above the market price of their existing shares III. Through rights offering, existing shareholders have the choice of maintaining proportionate investment in the company IV. Companies can use rights to dilute the holdings of existing owners a) a. II, III, & IV b) b. I, III, & IV c) c. III d) d. I only 61. This allows the shareholders to maintain the proportionate shares of ownership. a) a. pre-emptive rights b) b. price right c) c. protective right d) d. appraisal right 62. How do investors realize capital gains? a) a. buy a bond at premium, sell it at par b) b. buy a bond at a discount, sell it at a higher discount c) c. buy a bond at par, sell it at a discount d) d. buy a bond at premium, sell it at a higher premium 63. The first pay date on which the buyer of a stock will not receive the declared dividend is on which date? a) a. Payment b) b. Declaration c) c. Ex-dividend d) d. Record 64. ________________ is the market for long-term debt instruments while ____________ is the market for short-term debt instruments. a) a. Capital Market, Money Market b) b. Money Market, Capital Market c) c. Primary Market, Secondary Market d) d. Capital Market, Stock Market 65. All of the following are common attributes for preferred stocks and bonds EXCEPT a) a. Periodic payments to owners b) b. Can be callable c) c. Fixed maturity date d) d. Fixed payment rate 66. Stocks maybe the following except: a) a. Preferred b) b. Common c) c. Treasury d) d. Preemptive 67. In bookkeeping purposes, the outstanding shares of stock of a corporation are entered into its books at its a) a. Book Value b) b. Market Value c) c. Net Asset Value d) d. PAR Value 68. Which of the following statement/s is/are false? a) a. Preferred dividends must be paid in b) b. Preferred shareholders may be given full before any dividend distribution is dividends with the approval by the Board paid to common stock. of Directors. c) c. Holders of the preferred stock are d) d. None of the above entitled to receive dividends, which is a fixed rate of its market value 69. A bond is said to be secured if a) a. it is backed by specifically identified b) b. it is rated AAA rated by PhilRatings assets of the corporation as collateral c) c. it is backed by the reputation, credit d) d. all of the above record, and earning power of a corporation 70. PAR value refers to a) a. Arbitrary value given to stock at time b) b. Price quoted in exchange for shares of issuance and is used to record the traded that there at value of shares on the books of the corporations c) c. Tangible Net Asset Value per share d) d. None of the above 71. The settlement date of a bond is a) a. date when the client will pay for the b) b. date when the client will receive the cost of bond plus accruals coupon c) c. date when the client will receive the d) d. date when the client bought the bond maturity plus coupons, if any 72. If a corporation gives shares of stock of another corporation owned by the company as a form of dividend to its shareholders then that type of dividend is called a) a. transferred dividend b) b. property dividend c) c. stock dividend d) d. cash dividend 73. This gives the buyer the right, but not the obligation to buy or sell, a share at a predetermined price. a) a. Warrants b) b. Options c) c. Proxy d) d. Exercise 74. The minimum paid-up capital of a corporation is a) a. P5,000 b) b. P50,000 c) c. P500,000 d) d. P5,000,000 75. Securities not required to be registered with SEC. a) a. Stocks b) b. Exempt Securities c) c. Commercial Papers d) d. Bonds 76. These are shares that were bought back by the issuing corporation and are commonly called as reacquired shares. a) a. Common Stock b) b. Treasury Stock c) c. Preferred Stock d) d. Subscribed Stock 77. Corporations can raise capital by: a) a. By retaining profits b) b. By borrowing c) c. By issuing shares of stock d) d. All of the above 78. What are the features of TBills? I. zero coupon II. 360 day count III. issued at par IV. 364 day count a) a. I, II b) b. I, III c) c. I, II, III d) d. All of the above 79. Price at which someone is willing to pay for each share. a) a. book value b) b. stated value c) c. par value d) d. market value 80. The following are the four dates to remember when a dividend is declared. Arrange them in proper sequence. I. Payment Date II. Ex-Dividend Date III. Declaration Date IV. Record Date a) a. IV, III, II, I b) b. III, IV, II, I c) c. III, II, IV, I d) d. II, I, IV, III 81. Type of voting wherein the stockholder may spread his total votes among the number of positions to be filled in any manner. a) a. cumulative voting b) b. statutory voting c) c. non-cumulative voting d) d. convertible voting 82. What type of market is it if the proceeds from the sale of securities go directly to the issuing corporation? a) a. Primary b) b. Over-The-Counter c) c. Secondary d) d. Capitalization 83. Which of the following is true concerning treasury stock? a) a. It receives dividends b) b. Cannot be reissued to the public c) c. It is an outstanding stock d) d. It has no voting rights  A written authorization allowing another person to vote in the place of a shareholder 84. is a a) a. Warrant b) b. Right c) c. Debenture d) d. Proxy 85. The Corporation Code of the Philippines provides at least 25% of a corporation's ______ must be paid up. a) a. Paid-up capital b) b. Additional paid-in capital c) c. Authorized capital d) d. Subscribed capital 86. The maximum number of shares a corporation may issue multiplied by the par value of each share. a) a. Paid-in capital b) b. Subscribed capital c) c. Authorized capital d) d. Additional paid-in capital 87. CDE Incorporated has 30,000,000 shares of common stock authorized, 21,000,000 shares have been issued and there are 6,000,000 shares of treasury stock. How many shares are outstanding? a) a. 15,000,000 b) b. 9,000,000 c) c. 24,000,000 d) d. 3,000,000 88. What are the characteristics of an over-the-counter market? a) a. centralized & negotiated basis b) b. double-auction and centralized c) c. double-auction and decentralized d) d. negotiated basis and decentralized 89. What are the characteristics of an exchange market? a) a. Negotiated basis and decentralized b) b. Decentralized and double auction c) c. Double auction and centralized d) d. Negotiated basis and centralized 90. If ABC Company declares cash dividend which among its shareholders would be entitled to receive dividends? a) a. Those who bought the shares before b) b. Those who bought shares after the ex- the ex-dividend date dividend date c) c. Those who bought the shares on or d) d. Those who bought the shares on or before the ex-dividend date after the ex-dividend date 91. Which of the following is the correct arrangement according to seniority in liquidation? a) a. Common stock, preferred stock, b) b. Mortgage bond, debenture, preferred mortgage bond, debenture stock, common stock c) c. Preferred stock, mortgage bond, d) d. Debenture, mortgage bond, preferred debenture, common stock stock, common stock 92. The company pays a quarterly coupon of 4 and sells for 80. What is the current yield? a) a. 0.20 b) b. 0.40 c) c. 0.50 d) d. 0.1 93. When referring to dividends, the term cumulative means? a) a. Before fixed dividend is paid, all b) b. Dividends of previous years in arrears ordinary shares must receive dividends are payable before other dividends c) c. A percentage of profits must be paid d) d. The nominal value of the issue capital after all dividends are paid which is used on the computation of dividends 94. Who are qualified buyers of securities according to the Securities and Exchange Commission (SEC)? I. Bank II. Registered Investment House III. Insurance Company IV. Pension fund or retirement plan maintained by the Government of the Philippines or any political subdivision thereof or managed by a bank or other persons authorized by the Bangko Sentral to engage in trust functions V. Investment Company VI. Other persons as the SEC may by rule determine as qualified buyers a) a. V only b) b. I, II, III, IV, V, and VI c) c. I, II, III, and V d) d. I, II, III, IV, and, V 95. Which of the following are considered money market instruments? I. Convertible Preferred Stocks II. Treasury Notes Maturing in less than a year III. Bankers Acceptance IV. Repurchase Agreement a) a. II, III, and IV only b) b. II and III only c) c. I, III, and IV only d) d. III and IV only 96. All of the following pay dividends except: a) a. Debentures b) b. Cumulative preferred stocks c) c. Common Shares d) d. Participating preferred shares 97. Type of offering wherein the proceeds from the sale of securities go to the existing shareholders: I. Primary Offering II. Initial Public Offering III. Follow-on offering IV. Secondary Offering a) a. I only b) b. II and III c) c. I and II d) d. IV only 98. The term more commonly used to describe difference in yield is: a) a. percentage difference b) b. comparative yield c) c. basis points d) d. none of the above 99. The following statements are true except: I. In single proprietorship and partnership, the owner's private assets are at risk II. In single proprietorship, the owner's private assets are at risk III. In corporation, the owner's private assets are not at risk IV. In partnership and corporation, the owner's private assets are not at risk a) a. I, II and IV b) b. IV only c) c. II and III d) d. I and IV 100. Treasury bills have tenors of: I. 182 days II. 31 days III. 91 days IV. 364 days a) a. I, II, and III b) b. I, III, and IV c) c. II, III, and IV d) d. I, II, and IV 101. The following statements about offerings are true except: I. The proceeds from the sale of securities in primary offering goes to the issuing corporation II. Secondary offering is the second time the corporation is offering its shares to public III. No new funds are injected in the corporation in the case of secondary offering IV. The proceeds from the sale of securities in secondary offering goes to the existing shareholders a) a. Statements I, II, and III b) b. Statements III and IV c) c. Statement IV only d) d. Statement II only 102. Which of the following is true concerning treasury stock? a) a. It receives dividends b) b. Cannot be reissued to the public c) c. It is outstanding stock d) d. It has no voting rights 103. The Corporation Code of the Philippines provides at least 25% of a corporation's ______ must be paid up. a) a. Paid-up capital b) b. Additional paid-in capital c) c. Authorized capital d) d. Subscribed capital 104. The maximum number of shares a corporation may issue multiplied by the par value of each share a) a. Paid-in capital b) b. Subscribed capital c) c. Authorized capital d) d. Additional paid-in capital 105. The third market is also known as a) a. Exchange market b) b. Without broker intermediation c) c. OTC Trading d) d. Corporation offering 106. A doctrine that says that a corporation is a mere alter ego or business conduit of a person. a) a. Doctrine of Ultra Vires b) b. Intra Vires Act c) c. Doctrine of Legal Entity of the d) d. Doctrine of Piercing the Veil of Separate Personality of the Corporation Corporate Entity 107. A public company is defined as I. Sold a class of its own equity securities II. A class of equity securities listed on an Exchange III. With assets in excess of P50M and has 200 or more shareholders holding at least 100 shares a) a. I and II b) b. I,III, III c) c. I and III d) d. All of the above 108. Mr. Abueg owns 100,000 shares of XYZ Corporation whose authorized capital currently stands at 1,000,000 shares. XYZ Corporation will be issuing additional 1,000,000 shares to fund its expansion and Mr. Abueg has no plans at all to subscribe to the additional rights offering. What will happen to Mr. Abueg's shareholding in the company if he does not avail of the additional rights offering? a) a. Mr. Abueg's shareholding will increase b) b. Mr. Abueg's shareholding will be diluted c) c. The additional stock offering will be d) d. None of the above diluted 109. A corporation shall exist for a period not exceeding ________ unless sooner dissolved or unless said period is extended. a) a. Fifty (50) years from the date of b) b. Fifty (50) years from the date of incorporation issuance of the articles of incorporation c) c. Fifty (50) years from the date of d) d. fifty (50) years from the date of execution operation 110. Which of the following has the highest claim of assets in a corporation? a) a. Common Shares b) b. Warrants c) c. Options d) d. Rights 111. Which of the following are corporate entities not allowed to issue no-par value shares? I. Banks II. Transfer Agencies III. Trust companies IV. Insurance companies V. Public utilities VI. Building and Loan Associations VII. Clearing Agencies a) a. I, III, IV, V, VI b) b. I, II, III, IV, V, VI c) c. I, II, III, IV, V, VI, VII d) d. I, III, IV, V, VI, VII 112. A ___________ will result into an increase of number of shares and lower prices of shares a) a. Stock Split b) b. Reverse Stock Split c) c. Stock Conversion d) d. None of the above 113. This type of dividends entitle the holder of the stock to payment of dividends in arrears and participate with the holders of common stock in the remaining profits a) a. Cumulative b) b. Participating c) c. Cumulative-Participating d) d. Guarantee 114. A corporation is a Public Company if I. A corporation with a class of equity shares listed in an Exchange II. A corporation with assets in excess of P50,000,000 and having 200 or more holders, at least 200 of which are holding at least 100 shares III. A corporation with assets in excess of P50,000,000 and having 200 or more holders, at least 200 of which are holding at least 1 share a) a. I only b) b. I, II only c) c. I, III only d) d. I, II, III 115. The stockholders are not personally liable for corporate obligations and cannot be held liable to third persons who have claims against the corporation beyond their agreed subscriptions/contributions to the corporate capital. a) a. Doctrine of Piercing of the Corporate b) b. Limited Liability Company Veil c) c. Doctrine of Corporate Opportunity d) d. De Jure Corporation 116. The articles of incorporation of a Close Corporation must provide that: I. All the corporation’s issued stocks shall be held by not exceeding 20 specified person (except of treasury shares) II. All the corporation’s issued stocks shall be held by at least 19 specified person (except of treasury shares) III. All of the issued stocks shall be subject to one or more specified restrictions on transfer permitted by the Corporation Code IV. The corporation shall not list in any stock exchange or make any public offering of any of all classes of its stocks. V. The corporation shall list in any stock exchange or make any public offering of any of all classes of its stocks. a) a. I, II, III b) b. I, III, IV c) c. I, III, V d) d. II, III, V 117. A corporation shall be deemed not a close corporation when _______ of its voting stocks or voting rights is owned or controlled by another corporation which is not a close corporation. a) a. More than 50% b) b. At least 2/3 c) c. At least 1/3 d) d. All of the above 118. Which of the following cannot be amended in the Articles of Incorporation? a) a. Incorporators b) b. Term for which the corporation is to exist (years) c) c. Name of the Corporation d) d. Specific purpose / purposes of the incorporation 119. The ___________________ is enacted by a corporation to regulate, govern and control its own actions, affairs and concerns and its stockholders or members and directors and officers a) a. Articles of Incorporation b) b. By-Laws c) c. Certificate of Registration d) d. Code of Corporate Governance A corporation must adopt ________________ 120. a) a. By-Laws within 1 month after receipt of the official notice of the issuance of the certificate of incorporation by the SEC b) b. By-Laws within 1 year after receipt of c) c. By-Laws within 30 days after receipt of the official notice of the issuance of the the official notice of the issuance of the certificate of incorporation by the SEC certificate of registration by the SEC d) d. By-Laws within 6 months after receipt of the official notice of the issuance of the certificate of incorporation by the SEC 121. This doctrine disregards the principle on separate identity of a corporation from its stockholders when it is used to defeat public convenience, justify wrong, protect or cover fraud or defend crime or work or injustice. a) a. Doctrine of Corporate Entity b) b. Doctrine of Piercing of Veil of Corporate Fiction c) c. Ultra Vires Acts of a Corporation d) d. Doctrine of Corporate Opportunity 122. Acts acted by a Corporation beyond its legal powers or authority conferred by the Code or by its articles of incorporation a) a. Ultra Vires b) b. Intra Vires c) c. Supra Vires d) d. Extra Vires 123. This refers to the total amount of shares which a corporation is allowed to issue if the shares have a par value a) a. Authorized Stock b) b. Authorized Capital Stock c) c. Capital Structure d) d. Capital Stock 124. Which of the following will not be considered for the issuance of shares? a) a. Payment of cash or Real Estate b) b. Legal services provided by a lawyer c) c. Previously incurred indebtedness of d) d. Services to be rendered in the future the corporation 125. The articles of incorporation of ABC Corporation provide for the issuance of 100,000 shares without par value and an issued price per share of P10.00. At the time of incorporation, the subscription and paid-up capital should not be less than: a) a. P250,000.00 and P62,500.00 b) b. P1,000,000.00 and P250,000.00, respectively respectively c) c. P250,000.00 and P125,000.00, d) d. P250,000.00 and P250,000.00, respectively respectively 126. Which of the following will happen if the company declared a 10% stock dividend and a shareholder has 100 shares initially bought at Php 60/share. a) a. The shareholder will have 110 shares b) b. The shareholder will have 110 shares priced at Php 60/share priced at Php 54/share c) c. The shareholder will have 100 shares d) d. The shareholder will have 100 shares priced at Php 66/share priced at Php 54/share 127. A company announces a stock conversion of 6:1 and the current price of common stock is Php 12. How much is needed to convert a preferred share to a common stock? a) a. Php 2 b) b. Php 72 c) c. Php 12 d) d. Php 0.5 128. An investor buys a bond that has a coupon scheduled on April 30 and September 30 and will mature on September 30. What will the investor receive at the end of the maturity? a) Face Value of the bond and the b) Face Value of the bond and the April 30 September 30 coupon and September 30 coupon c) Premium Price of the bond d) Face value of the bond 129. An investor buys a bond with Face Value of Php 500,000 has a coupon of 4% p.a. scheduled on April 30 and September 30 and will mature on September 30. What will the investor receive at the end of the maturity? a) a. Php 520,000 b) b. Php 510,000 c) c. Php 500,000 d) d. Php 480,000 130. Which of the following statements are not true about no par value stocks a) a. Issued price should not be less than b) b. The paid-up capital requirement of the Php 5 par value stocks is equal to its subscribed capital requirement c) c. The company has no authorized d) d. The company has no capital stock capital stock but only authorized number of shares it can issue 131. The __________ takes into account the current market price of the bond in the measurement in the yield of return on investment. a) a. yield to maturity b) b. basis points c) c. current yield d) d. nominal yield 132. Which of the following can be performed by a salesman? a) Disclose non-public information b) Disclose company information upon request c) Transact client's money in advance prior d) All of the above to client's instruction 133. Non-voting shares can vote in the following situations except: a) Merger and consolidation b) Increase in authorized capital stock c) Determination of remuneration of Board d) None of the above of Directors 134. Juridical personality is granted upon issuance of: a) By-laws b) Articles of Incorporation c) Certificate of Incorporation d) Shares of stock 135. If a company wants to retire its Treasury Shares, it should a) Increase capital stock b) Issue new shares c) Release retained earnings d) Reissue the Treasury Shares 136. A juridical person can be a buyer if: I. It has a gross income of at least PHP 100 million II. It has a total portfolio investments of at least PHP 60 million in securities registered with the SEC or financial instruments issued by the government. a) Statement I is true, statement II is false b) Statement I is false, statement II is true c) Both statements are true d) Both statements are false 137. Which of the following provisions in the Article of Incorporation cannot be subject to amendments? a) Name of corporation b) Name of incorporators c) Terms of existence d) Primary purpose 138. In bookkeeping purposes, the outstanding shares of stock of a corporation are entered into its books at: a) Book Value b) Market Value c) Net Asset Value d) Par Value 139. If Maricel does not invest in cyclical industries, she still might buy stocks in a company that produces: a) Minivans b) Refrigerator c) Bricks and Stucco d) Antihistamine or allergy medicines 140. When a bond is “selling at premium”, it means: a) The bond is better quality than other b) The current yield is more than the yield issues of maturity c) The price of the bond is above its fair d) The rating of the bond will be upgraded value 141. All of the following pay dividends, EXCEPT: a) Debentures b) Cumulative preferred stocks c) Common shares d) Participating preferred shares 142. Which is the correct ranking of securities according to tenor (from shortest to longest)? a) Treasury Notes, Treasury Bonds, b) Treasury Bills, Treasury Notes, Treasury Treasury Bills Bonds c) Treasury Bonds, Treasury Bills, Treasury d) Treasury Bills, Treasury Bonds, Treasury Notes Notes 143. Which are true about rights offering? I. Offering price of new shares are below the market price of their existing shares II. Offering price of new shares are above the market price of their existing shares III. Through rights offerings, existing shareholders have the choice of maintaining proportionate investment in the company IV. Companies can use rights to dilute the holdings of existing owners. a) II, III & IV b) I, III & IV c) III d) I 144. A bond has an 11% coupon. The bond has a current market price of PHP1,050.00. The current yield is: a) 0.1095 b) 0.1048 c) 0.1047 d) None of the above 145. Which of the following is the correct arrangement according to seniority in liquidation? a) Common stock, preferred stock, b) Mortgage bond, debenture, preferred mortgage bond, debenture stock, common stock c) Preferred stock, mortgage bond, d) Debenture, mortgage bond, preferred debenture, common stock stock, common stock 146. Which of the following depicts a normal yield curve: a) 30 days (3.50%), 90 days (4%), 180 b) 30 days (3%), 90 days (4%), 1 yr (2%), 2 days (4.50%), 360 days (5%), 2 yrs (6%) yr (4%), 3 yr (5%) c) 30 days (3%), 60 days (7%), 90 days d) 30 days (7.50%), 40 days (6%), 1 yr (4%), 2 yr (4%), 3 yr (3%) (5%), 2 yr (3.50%), 1st month (2%) 147. A foreigner sells his USD and purchases a Peso Treasury Bill. What are the risks involved? I. Market Risk II. Sovereign Risk III. Price Risk IV. Liquidity Risk a) I and II b) I and III c) I, II and III d) All of the above 148. A written authorization allowing another person to vote in the place of a shareholder is: a) Warrant b) Right c) Debenture d) Proxy 149. To raise additional funds to finance its operations, a company may: a) Issue equity securities b) Issue debt securities c) Borrow from banks and lending d) All of the above institutions 150. Which of the following is the correct arrangement when declaring dividends? a) Ex-dividend date, Declaration date, b) Declaration date, Record date, Ex- Record date, Payment date dividend date, Payment date c) Declaration date, Ex-dividend date, d) Record date, Ex-dividend date, Record date, Payment date Declaration date, Payment date 151. If a corporation gives shares of stock of another corporation owned by the company as a form of dividend to its stockholders, then the type of dividend is called: a) Transferred dividend b) Property dividend c) Stock dividend d) Cash dividend 152. This type of voting affords minority shareholders their best opportunity for gaining representation on the Board of Directors: a) Statutory Voting b) General Voting c) Cumulative Voting d) None of the above 153. How much interest will Maya receive if she invests PHP 10,000.00 in a time deposit with a Philippine Bank at 4% for 90 days? a) PHP 92.50 b) PHP 100.00 c) PHP 107.50 d) PHP 400.00 154. Which of the following refers to an act or contract which is beyond the power of a corporation can lawfully exercise? a) Ultra Vires act b) Intra Vires act c) Illegal act d) Immoral act 155. The sale of securities to the following are considered exempt transactions EXCEPT: a) Bank b) Registered Investment House c) Insurance Company d) None of the above 156. What will you receive at maturity date of a bond if it pays interest on June 30, and also matures on June 30? a) Principal b) Interest c) Principal and Interest d) None of the above 157. This refers to the right of the issuer to retire the issue prior to the stated maturity date. a) Appraisal Right b) Call Feature c) Put Feature d) Right of First Refusal 158. Which of the following instruments invested in by an individual are free and clear of withholding tax? a) Commercial paper b) 7-year long term negotiable CDs c) 4-year corporate bonds d) Bank Tier 2 159. This is a type of order validity where a client places an order with the intention of having the order matched at its entirety or not at all. a) Fill-and-Kill b) Fill-or-Kill c) Fish-and-Kill d) Fish-or-Kill 160. What is a watered stock? a) Cash paid is less than par value b) Property or services exchanged is less than par value c) No consideration exchanged for the d) All of the above stock 161. Who should withhold and when should the withholding tax be withheld for government securities issued in the Philippines? a) The investor will repay/remit tax to the b) Dealer or broker will withhold tax at each government upon receipt of the coupon coupon interest payment c) The issuer will withhold tax at each d) The broker or dealer will withhold tax on coupon payment date maturity of these 162. A call feature enables an issuer to pay off bonds: a) Upon majority of votes of the b) At an amount less than stated par value bondholders c) After the stated maturity d) Prior to the scheduled maturity 163. Rodel bought a 3-year bond with face value of 1,000,000 for 975,000. The coupon of the bond is payable on April 30 and September 30 each year. The maturity of the bond is September 30. What will he receive at the maturity of the bond? a) The face value of 1,000,000 b) His principal of 975,000 c) Principal and face value d) Face value and last coupon  CDE Incorporated has 30,000,000 shares of common stock authorized, 21,000,000 164. shares have been issued and there are 6,000,000 shares of treasury stock. How many shares are outstanding? a) 15000000 b) 9000000 c) 24000000 d) 3000000 165. A stock split refers to a corporation action that increases the number of shares in a company. In effect, the share in par/price _______. a) Is maintained b) Decreases c) Increases d) None of the above 166. Bonds rated “CC” or below are called? a) Trash Bonds b) Junk Bonds c) Investment Grade Bonds d) Medium Grade Bonds 167. If a convertible preferred stock has a conversation ratio of 3, what should be its market price to be at parity with the common stock which is trading at PHP 15.00? a) PHP 18.00 b) PHP 45.00 c) PHP 5.00 d) PHP 12.00 168. The following are acceptable considerations for the issuance of shares except: a) Actual cash paid in corporation b) Amounts transferred from unrestricted retained earnings to a capital stock c) Service to be performed by a lawyer on d) None of the above the proposed increase of capital stock of corporation 169. If a client buys an FXTN on a Friday, when is the settlement? a) Monday b) Tuesday c) Wednesday d) Thursday 170. Which of the following are true? I. An investor can opt to be a non-qualified investor in the OTC II. A qualified investor may deal in the OTC III. A non-qualified investor can only deal in the OTC through a broker IV. A non-qualified investor may deal in the OTC by participating in a non- directional trust account a) I and II b) II and III c) I, II and III d) All of the above 171. A juridical person can be a buyer if: I. It has a gross income of at least PHP 100,000,000 II. It has a total portfolio investment of at least PHP 60,000,000 in securities registered with the SEC or financial instruments issued by the government a) Statement I is true, statement II is false b) Statement I is false, statement II is true c) Both statements are true d) Both statements are false 172. Helps companies raise funds, gives financial advice to help the issuer and also assists in marketing the securities to be issued: a) Broker b) Investment Company c) Investment Banker d) Clearing Agency 173. All of the following are common attributes for preferred stock and bonds EXCEPT: a) Periodic payments to owners b) Can be callable c) Fixed maturity date d) Fixed payment date 174. Consider two bonds, A and B. They are both issued at the same time by the same corporate firm. They both have the same maturity, seniority and coupon. The only difference between the two bonds is that A is callable and B is not. Which of the following best describes the relationship between A and B? a) Bond A will have a lower yield than bond b) Bond B will have a lower yield than bond B A c) Bond A will have a lower yield than bond d) Both A and B will have the same yields B 175. According to the Corporation Code of the Philippines, ________ is one where a corporation absorbs the other and remains in existence while others are dissolved. a) Acquisition b) Consolidation c) Liquidation d) Merger 176. How many months interest are paid with the first coupon for a bond issued January 1, 2007 and first coupon April 1, 2007? a) 1 month b) 2 months c) 3 months d) 6 months 177. In which of the following can a stockholder dissent, demand or withdraw his shares anytime? a) In case of amendment b) In case of sale c) In case of merger and consolidation d) All of the above 178. Juan took his CIS exam license on January 5, 2010. He was a licensed salesman from 2010-2013. From 2013 to 2015, he was living in the US. He went back to the Philippines the next year and went to SEC to ask for the status of his license. What will SEC ask him to do? a) SEC will request for proof that he took b) SEC will request for proof that he took the exam on 2010 the exam on 2016 c) SEC will renew his license provided that d) SEC will not renew his license anymore he pays a fee 179. Which type of share will be prioritized upon liquidation? a) Treasury b) Common c) Outstanding d) Preferred Answer Key 1. b 43. e 85. d 127. b 2. c 44. a 86. c 128. a 3. b 45. a 87. a 129. b 4. a 46. a 88. d 130. d 5. d 47. b 89. c 131. c 6. c 48. a 90. a 132. b 7. d 49. d 91. b 133. d 8. d 50. b 92. a 134. c 9. b 51. d 93. b 135. d 10. c 52. a 94. b 136. b 11. d 53. a 95. a 137. b 12. d 54. c 96. a 138. d 13. e 55. c 97. a 139. d 14. a 56. c 98. c 140. c 15. e 57. d 99. b 141. a 16. c 58. d 100. b 142. b 17. b 59. c 101. d 143. b 18. b 60. b 102. d 144. b 19. d 61. a 103. d 145. b 20. c 62. d 104. c 146. a 21. a 63. c 105. c 147. c 22. c 64. a 106. d 148. d 23. c 65. c 107. c 149. d 24. b 66. d 108. b 150. c 25. a 67. d 109. a 151. b 26. a 68. c 110. a 152. c 27. b 69. a 111. a 153. b 28. c 70. a 112. a 154. a 29. c 71. a 113. c 155. d 30. d 72. b 114. b 156. c 31. c 73. b 115. b 157. b 32. c 74. a 116. b 158. d 33. e 75. b 117. b 159. b 34. a 76. b 118. a 160. d 35. a 77. d 119. b 161. c 36. b 78. a 120. a 162. d 37. c 79. d 121. b 163. d 38. b 80. c 122. a 164. a 39. d 81. a 123. b 165. b 40. b 82. a 124. d 166. b 41. a 83. d 125. d 167. b 42. a 84. d 126. b 168. c 169. a 172. c 175. d 178. b 170. d 173. c 176. c 179. d 171. b 174. c 177. d  NAME : CLASS : FAMI FCLP Module 2 Mock Exam DATE : 167 Questions 1. This measures the company's solvency. a) a. Liquidity Ratio b) b. Activity Ratio c) c. Profitability Ratio d) d. Coverage Ratio 2. If most analysts expect inflation to be 8% but the government announces that it is 5%, other things being equal, what is the likely effect on stock prices? a) a. Stock prices would go up to 3% b) b. Stock prices would go down 3% c) c. Stock prices would go up d) d. Stock prices will go down 3. For a market to be considered liquid, it must be: I. There is marketability II. Price Continuity III. Depth IV. Low transaction cost a) a. I, II, IV b) b. I, III, IV c) c. II, III, IV d) d. I, II, III 4. One of the qualities of a transparent market is a) a. that the prices adequately reflect all b) b. gives well-timed and adequate information available information c) c. prompts execution of trades d) d. that all charges are disclosed to the client 5. The following are considered M1. I. Coins II. Demand Deposits III. Time Deposits IV. Travelers’ Check a) a. I, II, and III b) b. I and II c) c. I, II, IV d) d. All of the above 6. Dividends are derived from a) a. restricted retained earnings b) b. earnings of the company c) c. unrestricted retained earnings d) d. income of the company 7. Compute for the Net Investment Income of ABC Corp if the Total Operating Expense is 5,078,225, Investment Income is 67,350,200, Management Fees of 1,911,440, Custodian Fee of 779,000 and Provision for Income Tax of 903,615. a) a. 58,677,920 b) b. 63,756,145 c) c. 61,368,360 d) d. 59,581,535 8. If a client wishes to put an order with the intention of having the order matched at his indicated price and withdrawn when the whole amount cannot be matched. a) a. Fill or Kill b) b. Fill and Kill c) c. Iceberg d) d. Limit Order 9. How long should a Broker keep the customer record? a) a. 2 years b) b. 3 years c) c. 5 years d) d. 10 years 10. This is a type of trading account in which it can trade for a client without client’s go signal for each transaction. a) a. Solicited Account b) b. Unsolicited account c) c. Discretionary Account d) a. Margin Account 11. Mr. JL has a margin account that is in long position worth 85,000. What should be its maintenance margin? a) a. P21,250 b) b. P25,500 c) c. P29,750 d) d. P42,500 12. All brokers must have the following information of their clients except: a) a. Date and place of birth b) b. Civil Status c) c. Nationality d) d. Option for confirmation 13. Which is considered as the highest priority in consideration of orders for broker- dealer? a) a. stockholders order b) b. client transactions c) c. member-brokers d) d. board of directors 14. The following are qualified investors except a) a. Banks b) b. Insurance Company c) c. Entity, Corporation, Partnership or d) d. None of the above Trust with total assets of P1B 15. Customer Account Information Form contains the basic information of the client. It must be updated every: a) a. 2 years b) b. 3 years c) c. 4 years d) d. 5 years 16. The type of indices that is biased towards high market capitalization. a) a. Weighted Averages b) b. Market Value c) c. Equal Weighted Indices d) d. None of the above 17. The following statements refer to cases when a broker-dealer disclose customer information except: a) a. The information concerns illegal b) b. Disclosure is required by law activities on the part of the client c) c. The supervisor of the broker-dealer d) d. The client permits disclosure of the allows it information 18. When a salesman or associated person resigns, what should be done? a) a. Notify SEC within 7 business days b) b. Notify SEC within 15 calendar days c) c. Notify SEC within 15 business days d) d. Notify SEC within 30 days 19. The third market is also known as a) a. Exchange market b) b. Without broker intermediation c) c. OTC Trading d) d. Corporation offering 20. The following is/are concept/s of technical analysis except: I. Analysis of past market data to estimate future price II. Believes that prices are affected by numerous factors III. Prices are affected by psychology and sentiment of investors a) a. I and II b) b. I and III c) c. II and III d) d. All of the above 21. How does the central bank control money supply to combat inflation? a) a. Sell bonds, increase overnight rates, b) b. Buy bonds, decrease overnight rates, and decrease reserve requirements and increase reserve requirements c) c. Buy bonds, decrease overnight rates, d) d. Sell bonds, increase overnight rates, and decrease reserve requirements and increase reserve requirements 22. The number of days where the associated person must prepare, sign, and file with the Commission of a Compliance report a) a. Not later than 15 days each month b) b. Not later than 15 days each quarter c) c. Not later than 30 days each quarter d) d. Not later than 30 days each month 23. If someone wants to know the operating performance of a corporation for a particular year, the investor needs: a) a. balance sheet b) b. income statement c) c. statement of cash flows d) d. accumulated retained earnings 24. Which of the following is true: I. An investor can opt to be a non-qualified investor in the OTC II. A qualified investor may deal in the OTC III. A non-qualified investor can only deal in the OTC through the broker IV. A non-qualified may deal in the OTC by participating in a non-directional trust account a) a. I and III b) b. I, II, IV c) c. II, III d) d. All of the above 25. The country is experiencing high inflation and low unemployment. What does the market expect? a) a. increase interest rates, increase taxes, b) b. increase interest rates, lower taxes, increase government spending increase government spending c) c. increase interest rates, increase taxes, d) d. lower interest rates, lower taxes, lower lower government spending government spending 26. The phase in the economic cycle is described by an upturn in business activity, increasing GNP, and decreasing unemployment. a) a. Contraction b) b. Peak c) c. Trough d) d. Expansion 27. What are the component in computing GDP using Expenditure Approach? I. Interest Payments II. Depreciation III. Net Exports IV. Government Purchases V. Compensation a) a. I, II, III, and IV only b) b. I, III, IV only c) c. I, III, IV, and V only d) d. III and IV only 28. If the equilibrium price of a product is Php 85.00 and it is selling at Php 108, what could have happened? a) a. There is excess demand relative to b) b. There is excess supply relative to supply demand c) c. Supply and demand are in a state of d) d. It has nothing to do with supply and balance demand 29. Compute for return on assets given that net sales is Php 50 million, EBIT is Php 5 million, and total assets of Php 80 million: a) a. 6.25% b) b. 10% c) c. 16.67% d) d. 3.85% 30. What is an ideal distribution of assets for a conservative investor? a) a. 80% stocks, 10% bonds, 10% cash b) b. 50% stocks, 30% bonds, 20% cash c) c. 10% stocks, 10% bonds, 80% cash d) d. 35% stocks, 35% bonds, 30% cash 31. If the equilibrium price of a product is Php 500.00 and it is currently selling at Php 380, what could have happened? a) a. Demand and supply are in a state of b) b. There is excess in supply relative to balance demand c) c. There is excess in demand relative to d) d. Neither supply nor demand affect the supply price of the product 32. Intangible Assets are: a) a. Revenue Reserves b) b. Long-term Borrowing c) c. Current Assets d) d. Assets having no physical evidence, but having substantial value to the company 33. If an analyst wanted to determine a company's ability to pay those debt that would be maturing in one year, he would be most interested in: a) a. the current ratio b) b. the debt to equity ratio c) c. the inventory turnover d) d. the return on equity ratio 34. Which of the following statements are correct? I. Gross Domestic Product measures the output generated by the labor and capital owned by the citizens of the country, whether such goods and services are produced within or outside the countries. II. Salaries of foreigners working for multi-national companies within the Philippines form part of the GDP. III. Dollar remittances of OFWs are considered in the computation of the country's GNP. IV. Dollar income of exporters from their export business activities is considered part of GNP. a) a. I, II, III b) b. II, III, IV c) c. I, III, IV d) d. All of the above 35. Measures the value of all goods and services produced by a country in a given year, regardless of whether such goods or services are produced within or outside the country. a) GNP b) GDP c) CPI d) Inflation 36. Which of the following securities is not considered as liquid/semi-liquid asset: I. T-notes II. T-bills III. Short term Certificates of Indebtedness issued by BSP IV. Commercial Papers a) I and II b) III and IV c) III only d) IV only 37. The Consumer Price Index (CPI) is an indicator of the general level of price and is therefore also a measure of: a) a. Money Supply b) b. Purchasing Power of Money c) c. Economic Supply d) d. Interest Rates e) e. capital gains tax 38. Prices of stock in the secondary market are determined by: a) a. The companies that issue the stock b) b. The exchange where the stock is transformed c) c. Investors who affect supply and d) d. All of the above demand 39. An investor buys 1,000 shares of stock at Php120.50. The company declares a 7% stock dividend. The new cost basis per share for the investor is: a) a. 110 b) b. 112.07 c) c. 128.94 d) d. 130 40. Focuses on the various categories of consumers who purchase final goods and services in the output market of the economy namely: households, investors the government and foreigners. a) a. expenditure approach b) b. income approach c) c. deflation d) d. consumer price index 41. Individuals on fixed income are hurt most during? a) a. Recession b) b. Depression c) c. Deflation d) d. Inflation 42. If a convertible preferred stock has a conversion ratio of 3, what should be its market price to be at parity with the common stock which is trading at Php 15.00. a) a. Php 18.00 b) b. Php 45.00 c) c. Php 5.00 d) d. Php 12.00 43. Short-term cash requirement of a corporation is more commonly referred to as a) a. cash-on-hand b) b. liquid assets c) c. working capital d) d. cash inflow 44. Mr. Grey holds some X investment bonds, but its falling earnings worry him. To determine whether X can meet his interest payments. He analyzes the company's: a) a. Coverage ratios b) b. Profitability ratios c) c. Liquidity ratios d) d. Capitalization ratios  A technical analyst examining a company's stock investment potential would be 45. most interested in its: a) a. Price/Earnings Ratio b) b. Dividend Yield c) c. Working capital d) d. Price Movements 46. During periods of slow economic growth, bond prices typically: a) Fall b) Climb c) Remain stable d) Behave erratically 47. Price range at which there is an increase in the supply of stock and any price increase will reverse it abruptly: a) a. Resistance level b) b. Support level c) c. Relative Strength Ratio d) d. Moving Average Lines 48. Expansionary monetary policy is accomplished by: a) a. increasing reserve requirements, b) b. increasing reserve requirements, buying government securities and selling government securities and increasing discount rates increasing discount rates c) c. decreasing reserve requirements, d) d. decreasing reserve requirements, selling government securities and buying government securities and decreasing discount rates decreasing discount rates 49. Restrictive monetary policy is accomplished by: a) a. increasing reserve requirements, b) b. decreasing reserve requirements, buying government securities and selling government securities and increasing discount rates decreasing discount rates c) c. increasing reserve requirements, d) d. decreasing reserve requirements, selling government securities and buying government securities and increasing discount rates decreasing discount rates 50. Arrangement of liquidity ratios from least stringent/severe to most stringent/severe is: a) a. Cash Ratio, Quick Ratio, Current b) b. Current Ratio, Quick Ratio, Cash Ratio Ratio c) c. Quick Ratio, Cash Ratio, Current Ratio d) d. Current Ratio, Cash Ratio, Quick Ratio 51. The payment of cash dividends would result to which of the following cash flow statement activity: a) a. Cash used in operating activities b) b. Cash provided by operating activities c) c. Cash used in financing activities d) d. Cash provided by financing activities 52. Another term for M3 is: a) a. domestic liquidity b) b. broad money c) c. currency in circulation d) d. quasi-money 53. The Money Supply as measured by M1 includes which of the following: I. Time Deposits II. Demand Deposits III. Travelers' Check IV. Currency in Circulation a) a. II only b) b. I & II c) c. I, II, & III d) d. II, III, & IV 54. Difference between the price at which a security is sold and the original purchase price of that security: a) a. capital gains b) b. nominal yield c) c. capital appreciation d) d. YTM 55. Quasi-money refer to: a) a. checking accounts b) b. currency in circulation c) c. savings and time deposits d) d. deposit substitutes 56. Arrange the business cycle in correct sequence: I. Trough II. Expansion III. Contraction IV. Peak a) a. II, IV, III, I b) b. II,, I, IV, III c) c. I, II, III, IV d) d. II, IV, I, III 57. Measures the company's solvency: a) a. Liquidity Ratio b) b. Activity Ratio c) c. Profitability Ratio d) d. Coverage Ratio 58. If most analysts expect inflation to be 8% but the government announces that it is 5%, other things being equal, what is the likely effect on stock prices? a) a. Stock prices would go up to 3% b) b. Stock prices would go down 3% c) c. Stock prices would go up d) d. Stock prices will go d