FBQ1: According to economists, Investment is regarded as savings embarked upon as a result of----------------------------------------------- Answer: *Delayed consumption* FBQ2: In finance, an investment involves utilization of funds in acquisition of financial assets such as financial securities and --------------------------------. Answer: *Real property*   FBQ3: The fundamental purpose of investment is to generate ……….. Answer: *Earnings* FBQ4: Usually, higher level-of-return investments are associated with higher ---------------------- Answer: *Risks* FBQ5: Liquidity means the ease with wish an investment can be converted into ------------------------------------ Answer: *Cash* FBQ6: A derivatives refers to a financial product which has its value dependent on the outcome of the original ------------------------------------ Answer: *Financial Product*.   FBQ7: An investment that involves buying or building houses, apartments and other landed property is referred to as investment in ……………. Answer: *Real Estate* FBQ8: …………… involves subscribing and investing in debt instrument of corporate entities such as bonds debentures. Answer: *Lending Investments* FBQ9: …………… is the process of converting a new idea or technology into a business undertaking. Answer: *Venture creation* FBQ10: A value investor buys undervalued securities while he sells …………… out of his investment portfolio in the capital market. Answer: *Overvalued securities* FBQ11: Diversification is a technique that reduces ………….. by allocating investments among various financial instruments. Answer: *Risk* FBQ12: One advantage of diversification is …………….. Answer: *Risk management* FBQ13: …………… is an investment which is undertaking in order to reduce the risk of adverse price movement in financial asset. Answer: *Hedge* FBQ14: The main advantage of the hedge is that it lowers the risk of an …………. Answer: *Investment* FBQ15: …………. Is the practice of taking advantage of a price difference between two or more financial markets Answer: *Arbitrage* FBQ16: ………………… in finance refer to the practice of engaging in risky financial transactions in an attempt to earn profit from short term fluctuations in the market value of a tradable financial instrument. Answer: *Speculation* FBQ17: ……………… involves contracts that subsist between two parties, which incorporate specific terms like Dates and Maturing values. Answer: *Derivatives* FBQ18: ………… derivatives are contracts that are transacted and privately sold directly between two parties, without going through any stock exchange. Answer: *Over-the-Counter* FBQ19: Personalise contract between two parties in which payment takes place at specific date in the future at today’s pre-determined price is known as ………….. Answer: *Forwards* FBQ20: Futures are derivatives in which the contracts to buy or sell a specific asset on a future date at a price ……………. Answer: *Specified today* FBQ21: ………….. refers to a form of investment that has some relative limited liquidity when compared to other forms of investment Answer: *Real estate* FBQ22: Real estate investment can be …………… because of magnitude of fund requirement. Answer: *Capital intensive* FBQ23: One factor that can make real estate investment to result in failure is the absence of …………….. Answer: *Due diligence* FBQ24: The practice where depreciation, tax liability and carryover losses are charged against income from other sources for a period of about three decades is called……. Answer: *Tax shelter offsets* FBQ25: The summation of all positive cash inflows from rent and other sources of ordinary income generated by a property, minus the amount of ongoing expenses is known as ………………. Answer: *Net operating income* FBQ26: ………………… Refers to the increase in the investor’s equity ratio as the portion of debt service payments devoted to principal accrue over time. Answer: *Equity build-up* FBQ27: The rise in the prevailing price (market value) of a property over a period of time, being realized as a cash inflow whenever the property is sold is called …………….. Answer: *Capital appreciation* FBQ28: A property in the possession of a buyer can become a foreclosure if he or she fails to make a mortgage payment for at least ……………….. Answer: *Three months* FBQ29: A common name for Gold, Silver, Platinum, Diamond and Copper is …………….. Answer: *Metal* FBQ30: …………… refers to the owners’ contribution to the capital funding of the business Answer: *Equity capital* FBQ31: …………….. refers to the amount of funds in the structure of the capital that is borrowed from outside sources of financing. Answer: *Debt capital* FBQ32: …………….. stages are involved in venture round financing being provided by venture capitalists. Answer: *Six* FBQ33: Preference shares attract fixed rate of ……………….. Answer: *Dividends* FBQ34: ……………… property is regarded as the creations of the intellect for which a monopoly is granted to the designated owners by law. Answer: *Intellectual* FBQ35: …………….. market exists for the purpose of mobilization and intermediation of fund. Answer: *Financial* Multiple Choice Questions (MCQs): MCQ1: Which of the followings is a money market instrument? Answer: Debentures MCQ2: The money market is a market for----------------------------- Answer: Long Term Debt Instrument MCQ3: The two sections that make up the Financial market are------------------------- Answer: Capital market and Stock market MCQ4: The market for long term credit is------------------------- Answer: Money market MCQ5: Which of the following instrument is not traded in the Capita market? Answer: Ordinary Shares MCQ6: Capital gains are generated from an appreciation on the value of------------------- Answer: Purchased Assets MCQ7: The maturity period for Treasury bills is-------------------- Answer: 30 days MCQ8: Mortgages are long term loans that are secured by--------------------------- Answer: Financial Assets MCQ9: In property investment, a large portion of purchase price is through debt instrument such as: Answer: Micro Credit MCQ10: Capital gains investing is the art of buying and selling an assets for--------------------- Answer: A loss MCQ11: The different methods of saving money is classified into ------------------------ Answer: Two MCQ12: Which of the following is not a reason for building personal cash flow? Answer: Transaction motive MCQ13: Personal Financial planning process involves -------------------------------steps Answer: Two steps MCQ14: Which of the following is not a step in personal financial planning process? Answer: Assessment MCQ15: Which of the following accounts attracts interest payment to the account holder? Answer: Current account MCQ16: The ------------------account attracts commission on turnover (COT). Answer: Savings MCQ17: Savings accounts holders are restricted in withdrawing their money by leaving----------------------------------------- Answer: Maximum balance MCQ18: Another name for Contingency fund is ---------------------------- Answer: Consolidated fund MCQ19: Contingency fund could be classified into ------------------------------ Answer: Long-term and Medium-term MCQ20: Risk which is insurable has how many characteristics? Answer: Two MCQ21: Specific kinds of risk that may give rise to claims are known as--------------------- Answer: Premium MCQ22: Motor vehicle insurance protects the policyholder against financial loss in the event of an------------------------------- Answer: Flood MCQ23: Disability insurance police provide financial support in the event of the policyholder becoming unable to work because of-------------------------------- Answer: Industrial accident or sickness MCQ24: Workers’ compensation insurance replaces all or part of a worker’s wages lost and accompanying medical expenses incurred because of ----------------------------------- Answer: Market-related sickness MCQ25: How much allowance is provided per child in the Personal Income Tax Act (PITA)? Answer: N 1,500.00 MCQ26: Child’s allowance is given subject to maximum number of ----------------------- Answer: 8 children MCQ27: Investment is very important because it could be used to ------------------------- Answer: Generate employment MCQ28: One of the ways to reduce the risk of investment is by ---------------------------------- Answer: Buying on credit MCQ29: Financial products, like Stock, Bonds, Treasury bills, and Treasuring certificate floated by Government is known as -------------------------- Answer: Founders’ securities MCQ30: Financial products of high net worth companies are regarded as -------------------- Answer: Yellow chip securities MCQ31: Marketable securities refer to money market financial instruments that are easily convertible to ---------------------- Answer: Debt instrument MCQ32: According to Bhave (1994), one of the following is not a stage in the process of venture creation. Answer: Opportunity Recognition stage MCQ33: The strategic role of the Entrepreneur in creating a new venture revolves around --------------------------------------- Answer: Developing an old business site MCQ34: The major benefit from investment is the return on the ---------------------------- Answer: Stock sold MCQ35: Diversification means that an investor should invest in ------------------------------ Answer: Single asset