Do You Have Basic Idea Of Financial Statements?

12 Questions | By Nikkojazz | Last updated: Mar 21, 2022 | Total Attempts: 946

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This quiz has been developed for students, Finance professionals, learning or working in Finance management or sector, The financial data of the company or business are shown in assets, liabilities, and equity. There is a list of questions related to financial statements and terms. So, let's try out the quiz and test your knowledge. All the best!

Questions and Answers

1.

Which of the following has returned the highest rate of return on investment since 1926?
- A.
  
  Long-term corporate bonds
- B.
  
  U.S. treasury bills
- C.
  
  Small company stocks
- D.
  
  Common stocks
2.

Assuming a 4% inflation rate, how long would it take to lose half of your purchasing power? (A dollar is worth only 50 cents) Hint: Rule of 72
- A.
  
  12 years
- B.
  
  18 years
- C.
  
  20 years
- D.
  
  24 years
3.

In general, a savings account with a bank often cannot make enough interest to offset the losses from inflation.
- A.
  
  True
- B.
  
  False
4.

In general, what happens to bond prices when interest rates go up?
- A.
  
  Bond prices rise
- B.
  
  Bond prices fall
- C.
  
  Bond prices neither rise or fall
5.

Treasury Bonds (T-Bonds) pay a higher interest rate than Treasury Bills (T-Bills).
- A.
  
  True
- B.
  
  False
6.

What is a bank CD?
- A.
  
  A multimedia CD-ROM for a computer?
- B.
  
  A music CD for home entertainment?
- C.
  
  A certificate of deposit with interest payments that is placed with a bank for a specific period.
- D.
  
  All of the above
7.

What is a P/E ratio?
- A.
  
  The ratio of the price of a stock divided by the stock's earnings per share
- B.
  
  The ratio of the price of a bond divided by the coupon of the bond
- C.
  
  The ratio of the price of a stock divided by the stock's yield
8.

What is an income statement?
- A.
  
  A statement of the profits and losses of a company
- B.
  
  Part of a financial statement
- C.
  
  A statement that summarizes revenues and expenses of a firm over a time period
- D.
  
  All of the above
9.

What is a dividend?
- A.
  
  A cash payment distributed among creditors
- B.
  
  A payment of additional shares of stock to stockholders
- C.
  
  A bonus to employees
- D.
  
  A division of an international corporation
10.

What is the Dow Jones Industrial Average or DJIA or the Dow?
- A.
  
  Price-weighted average of 30 industrial company stocks
- B.
  
  An indicator of the U.S. stock market
- C.
  
  On May 30, 1996, total components multiplied by 0.34599543
- D.
  
  All of the above
11.

What is Accounting?
- A.
  
  Market Capitalization
- B.
  
  Bookkeeping of business or personal finances
- C.
  
  Asset allocation.
12.

What is an Asset?
- A.
  
  Any item owned by a business or individual.
- B.
  
  A financial obligation.
- C.
  
  An obligation to pay money to a third party.
- D.
  
  Option 4