Finance Quizzes

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31. Net Present Value is calculated as
(A) cash inflow – cash outflow
(B) cash outflow – cash inflow
(C) PV of cash inflow – PV of cash outflow
(D) PV of cash outflow – PV of cash inflow

32. An investment should be accepted if its NPV is
(A) 0
(B) 1
(C) positive
(D) negative

33. The ratio between the amount of profit and investment is called the
(A) NPV
(B) opportunity cost
(C) risk premium
(D) rate of return

34. An investment should be accepted if
(A) Rate of Return > Opportunity Cost
(B) Rate of Return < Opportunity Cost
(C) Rate of Return = Opportunity Cost
(D) A, B and C are irrelevent

35. Governments and corporations issue bonds to
(A) borrow money
(B) lend money
(C) both A and B
(D) none of these

36. Regular interest payment to the bond holders is called
(A) principal
(B) coupon
(C) face value
(D) yield

37. At maturity the bond holders get back their principal. The principal is called
(A) coupon
(B) face value
(C) yield
(D) return

38. Any economic resource that can produce economic value to the holder is called
(A) asset
(B) return
(C) maturity
(D) yield

39. A collection of assets held by an investor is called
(A) corporate bond
(B) random returns
(C) risk premium
(D) portfolio

40. The risk of a well-diversified portfolio depends on the __________ of the securities included in the portfolio.
(A) specific risk
(B) market risk
(C) both A and B
(D) none of these

ANSWERS: FINANCE QUIZZES
31. C
32. C
33. D
34. A
35. A
36. B
37. B
38. A
39. D
40. B

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