[kazoku 6] Upjfa Finance Academy 52.2 Final Exam

50 Questions

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[kazoku 6] Upjfa Finance Academy 52.2 Final Exam

Choose the best answer to the following questions. Good luck!


Questions and Answers
  • 1. 
    April is a working student who earns ₱15,000 monthly. As a quick and simple rule of thumb, how much money would you recommend for her to allocate for her savings, needs, and wants respectively?
    • A. 

      7500, 4500, 3000

    • B. 

      4000, 9000, 1000

    • C. 

      7500, 7500, 0

    • D. 

      3000, 7500, 4500

  • 2. 
    If you are 18 right now, what is the best age for you to begin investing?
    • A. 

      18

    • B. 

      21

    • C. 

      25

    • D. 

      35

  • 3. 
    Which of the following choices can be considered as something attributable more to an investor’s risk tolerance rather than their risk capacity?
    • A. 

      Investor's Experience

    • B. 

      Time Horizon of Investment

    • C. 

      Income

    • D. 

      Age

  • 4. 
    Alexa is a 58-year old mother who has been investing for over 20 years now. She wants to be able to save enough money to buy a house before she retires in 2 years time. Which among the following are factors used to estimate Alexa’s risk capacity?
    • A. 

      Both of these factors

    • B. 

      Alexa will retire in 2 years

    • C. 

      Alexa wants to save enough money to buy a house

    • D. 

      Neither of these factors

  • 5. 
    Which of the following best exemplifies a want expense?
    • A. 

      Eating steak everyday

    • B. 

      Purchasing an affordable house to live in

    • C. 

      Replacing a broken phone

    • D. 

      Purchasing a second hand car

  • 6. 
    Andrea’s financial goal for her investments is capital preservation. Given this, what investment should she have mainly purchased?
    • A. 

      On January 25, Andrea invested in a 90-day T-Bill which generated around 2% return to counter the effects of inflation.

    • B. 

      Andrea bought land in BGC 3 years ago, and was very happy to see that the price of the land increased by around P2M from the date of purchase.

    • C. 

      ​​​​​​​Andrea is currently investing in bonds with average yields of around 8% annually.

    • D. 

      Andrea bought 100 shares of JFC (stock) at the price of P243 per share. The current stock price of JFC is P265.

  • 7. 
    The price of a fried chicken meal is Php50 in 2020 and Php55 in 2021. Assuming that this meal is the only thing people buy, what is the inflation rate from 2020 to 2021?
    • A. 

      10.00

    • B. 

      5.00

    • C. 

      9.09

    • D. 

      4.88

  • 8. 
    Php1,000.00 is placed in a savings account compounded semiannually with a stated annual rate of 2%. Its value one year from now and two years from now, respectively, is:
    • A. 

      ​​​​​​Php1,020.10, Php1,040.60

    • B. 

      Php1,020.00, Php1,040.00

    • C. 

      Php1,020.00, Php1,040.40

    • D. 

      ​​​​​​​Php1,020.10, Php1,040.00

  • 9. 
    Php1,000.00 is placed in a savings account compounded semiannually with an effective annual rate of 2%. Its value one year from now and two years from now, respectively, is:
    • A. 

      Php1,020.00, Php1,040.40

    • B. 

      Php1,020.10, Php1,040.60

    • C. 

      Php1,020.00, Php1,040.00

    • D. 

      Php1,020.10, Php1,040.00

  • 10. 
    Emily is an investment banker for IMG based in the Netherlands. In IMG’s policies, she is restricted from investing in speculative bonds. For this purpose, Emily makes it a point to check and monitor changes in credit ratings of Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings. Which among the following countries is Emily most likely to not invest in or buy bonds from?
    • A. 

      Greece, whose credit ratings last updated by S&P to be BB- with positive outlook, BB with positive outlook for Fitch’s and B1 with stable outlook for Moody’s

    • B. 

      Denmark, whose credit rating remained at AAA for S&P and Fitch, and at Aaa for Moody’s, all with a stable outlook

    • C. 

      USA, whose credit rating was last downgraded by S&P to AA+ from AAA last 2011 due to concerns of budget deficits

    • D. 

      Philippines, whose credit rating was last updated by S&P to BBB+ with negative outlook last April 2019, and last updated by Fitch to BBB with positive outlook last February 2020

  • 11. 
    Luna is an investment banker for MoonLife Financial. In MoonLife’s policies, she is restricted from investing in high yield bonds. For this purpose, Luna makes it a point to check and monitor changes in credit ratings of Standard & Poor’s, Moody’s Investors Service, and Fitch Ratings. Which among the following countries is Luna most likely to invest in or buy bonds from?
    • A. 

      Philippines, whose credit rating was last updated by S&P to BBB+ with negative outlook last April 2019, and last updated by Fitch to BBB with positive outlook last February 2020

    • B. 

      Denmark, whose credit rating remained at AAA for S&P and Fitch, and at Aaa for Moody’s, all with a stable outlook

    • C. 

      USA, whose credit rating was last downgraded by S&P to AA+ from AAA last 2011 due to concerns of budget deficits

    • D. 

      Greece, whose credit ratings last updated by S&P to be BB- with positive outlook, BB with positive outlook for Fitch’s and B1 with stable outlook for Moody’s

  • 12. 
    Arthur is a bond investor. Like any other investor, he aims to get the best return possible. He is currently considering a zero-coupon bond trading at $925 and has a par value of $1000 which is paid at maturity after one year. If current interest rates were to rise, giving newly-issued bonds a yield of 10%, will the zero-coupon bond still be attractive to Arthur? What will most likely happen to the price of the pre-existing zero-coupon bond?
    • A. 

      No; The price will decrease

    • B. 

      Yes; The price will not change

    • C. 

      Yes; The price will increase

    • D. 

      No, the price will increase

  • 13. 
    Margaret is a newbie investor. She aims to lower her portfolio volatility. In order to do that she has to have a selection of assets that would make her portfolio “Markowitz-efficient”. Assuming that all assets have similar expected returns, which of the following would ensure that Margaret will incur the least amount of risk for a desired level of return?
    • A. 

      A set of assets with returns that are consistently uncorrelated or has near zero correlation.

    • B. 

      A set of assets that are consistently uncorrelated or has near zero correlation.

    • C. 

      A set of assets with returns that are negatively correlated.

    • D. 

      A set of assets that are negatively correlated.

  • 14. 
    The following statements pertain to basic concepts in asset allocation and investments. Identify which among the following is true:
    • A. 

      Risk aversion of most investors in a market causes riskier securities to have higher expected returns.

    • B. 

      An asset held as part of a portfolio is generally riskier than the same asset held in isolation.

    • C. 

      A bear market is a sound market to invest in as many equities gain value and share prices are generally stable.

    • D. 

      The PSEi is composed of a fixed basket of 328 companies as of 2019 which represents the general movement of the Philippine stock market.

  • 15. 
    Mr. Rivera, a foreign investor, uses an investment strategy where he divides up the total amount to be invested across periodic purchases of a target asset. What is the main purpose of this strategy?
    • A. 

      To reduce the impact of volatility on the overall purchase

    • B. 

      To maximize returns

    • C. 

      To reduce the impact of economic inflation

    • D. 

      All of the choices are correct

  • 16. 
    Mykie is planning to buy stocks through Philstocks. If she is planning to earn solely through capital gains, how much should a stock’s price increase for her to break-even?
    • A. 

      1.09%

    • B. 

      0%

    • C. 

      10%

    • D. 

      0.25%

  • 17. 
    Given the following candlestick chart, which day did the stock’s price open at 112, closed at 114, had the highest price at 115, and lowest at 111?
    • A. 

      April 6

    • B. 

      April 2

    • C. 

      April 7

    • D. 

      April 9

  • 18. 
    Ms. Rona recently started investing in stocks for the long term. However, she saw drastic changes in the prices of her investments. Which of the following would be a good reason to sell?
    • A. 

      She reassessed her risk-profile and found that stocks aren’t suited for her.

    • B. 

      A post online suggests a better stock pick.

    • C. 

      Stock B’s price doubled. It’s an opportunity to earn a lot

    • D. 

      Stock A’s price fell by 15%. It’s best to cut her losses.

  • 19. 
    Ruben started investing 5 years ago and had a moderate investor’s profile. Upon reviewing the performance of his investments, he decided to rebalance his portfolio. Which of the following is a good reason behind this decision?
    • A. 

      He wants to maintain his asset allocation and risk-reward profile.

    • B. 

      There is a new fad in investments.

    • C. 

      His portfolio is performing just as he planned.

    • D. 

      He sees an opportunity in more aggressive investments.

  • 20. 
    An equity fund significantly outperformed its benchmark for 3 years and similarly underperformed for 2 years. You can infer that the fund ________.
    • A. 

      Has a different asset mix than the benchmark it is tracking

    • B. 

      Has an incompetent fund manager

    • C. 

      Performs better than its peer group

    • D. 

      Is a bad investment

  • 21. 
    Which of the following is not likely to increase GDP?
    • A. 

      Raising government revenue by increasing tax rates

    • B. 

      Php300-billion cash injection to the market through bond purchases

    • C. 

      BSP lowering the benchmark interest rate

    • D. 

      Infrastructure projects like the “Build, Build, Build” Program

  • 22. 
    Ricardo plans to buy a house which is worth 2 million in 10 years. He initially invested 60,000 in a mutual fund with a stated interest rate of 7% compounded annually and invests an additional 10,000 monthly. Which scenario needs to happen for him to reach his goal?
    • A. 

      Best-case

    • B. 

      Worst-case

    • C. 

      Base-case

    • D. 

      All cases are correct

  • 23. 
    The following include tax-advantaged investments in the Philippines, except for:
    • A. 

      Roth Individual Retirement Account

    • B. 

      Personal Equity & Retirement Account

    • C. 

      Personal Equity and Savings Option Fund

    • D. 

      PAG-IBIG MP2 SAVINGS

  • 24. 
    Given the following information, how much cash are you actually entitled to receive if you own 500 common shares?
    • A. 

      Php450

    • B. 

      Php500

    • C. 

      Php1

    • D. 

      Php25

  • 25. 
    Which of the following companies are part of a fixed basket of common stocks of listed companies, carefully selected to represent the general movement of the Philippine stock market?
    • A. 

      Ayala Land, Inc.

    • B. 

      AllHome Corp.

    • C. 

      Fruitas Holdings Inc.

    • D. 

      The Philippine Stock Exchange, Inc.

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