Farm Management Trivia Quiz: Exam!

43 Questions | Total Attempts: 50

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Farm Management Trivia Quiz: Exam!


Questions and Answers
  • 1. 
    If the United States enters a trade agreement with country X and as a result country X charges a low tariff for imported US pork,  what happens to country X's demand for US pork?
    • A. 

      Shifts to the left

    • B. 

      Shifts out and to the right

    • C. 

      It doesn't change because US pork supplies remain fixed

    • D. 

      None of the above

  • 2. 
    To protect against grain lost due to wind damage to a grain storage facility, a farmer would need:
    • A. 

      Liability insurance 

    • B. 

      Crop insurance

    • C. 

      Property insurance

    • D. 

      Accident insurance

    • E. 

      None of the above

  • 3. 
    Sue is considering a purchase of a 132-acre farm. She figures the farm will generate a profit $29,700 per year. She can get a fixed rate loan on the farm at 3.35% APR. Using the capitalization approach to value the property, Sue figures she could pay ______________ per acre for the farm. (nearest dollar)
    • A. 

      $297,000

    • B. 

      $886,567

    • C. 

      $6,716

    • D. 

      $995

  • 4. 
    At the beginning of last year, a farmer had an outstanding loan of $217,480. The interest rate was 6% APR. If the farmer made one loan payment at the end of the year of $35,000, what was the outstanding balance at the end of the year?
    • A. 

      $179,431.20

    • B. 

      $204,431.20

    • C. 

      $182,480

    • D. 

      $195,528.20

    • E. 

      None of the above

  • 5. 
    If John wants to know how much money he will have to live on when he retires, what process will he use to figure out the value of his current investments at retirement? 
    • A. 

      Disounting

    • B. 

      Budgeting

    • C. 

      Amortizing

    • D. 

      Compounding

    • E. 

      None of these

  • 6. 
    The financial ratio that would be best to evaluate a farms ability to cover unexpected operational expenses is: 
    • A. 

      Rate of Return of Assets

    • B. 

      Asset Turnover Ratio

    • C. 

      Current Ratio

    • D. 

      Debt-To-Asset Ration

    • E. 

      Liquidity Ration

  • 7. 
    Price that must be paid for options you like?
    • A. 

      Strike price

    • B. 

      Short hedge

    • C. 

      Premium

    • D. 

      Grid

    • E. 

      Long hedge

  • 8. 
    The change in total cost or total variable cost due to a one-unit change in input is best defined as: 
    • A. 

      Marginal Imput

    • B. 

      Marginal Revenue Product

    • C. 

      Cost Production

    • D. 

      Marginal Input Cost

  • 9. 
    Which economic principle states that at some point in time marginal product decreases with each additional unit of input?
    • A. 

      Opportunity Cost

    • B. 

      Diminishing Economic Returns

    • C. 

      Diminishing Physical Returns

    • D. 

      Diminishing Total Returns

  • 10. 
    The money on deposit to ensure performance of a futures contract is called:
    • A. 

      Premium

    • B. 

      Commission

    • C. 

      Margin

    • D. 

      Basis

    • E. 

      Hedge

  • 11. 
    A firm should shut down in the short-run if it cannot cover its
    • A. 

      Time costs

    • B. 

      Total cost

    • C. 

       Fixed costs

    • D. 

      Variable costs

    • E. 

      Overhead costs

  • 12. 
    The main drawback of an adjustable rate mortgage is: 
    • A. 

      The interest rate can increase

    • B. 

      The initial interest rate is usually higher than for other types of loans

    • C. 

      It is only available for loans less than $10,000

    • D. 

      Interest expense is not deductible farm expense

    • E. 

      None of these

  • 13. 
    How many acres would be in the parcel of ground with the legal description of NE1/4, SE1/4, S1, T3N, R3E of the 5th P.M.? 
    • A. 

      160

    • B. 

      None of these

    • C. 

      640

    • D. 

      10

    • E. 

      40

  • 14. 
    On April 1, 2017, Kate borrowed $25,000 to plant corn. On November 1, 2017, she repaid the $25,000 along with $1239.58 interest. What annual interest rate did she pay?
    • A. 

      9.75%

    • B. 

      9.25%

    • C. 

      8.50%

    • D. 

      None of these

    • E. 

      10.50%

  • 15. 
    How many pounds of 34% protein supplement must be mixed with 9% protein corn to make a ton of 16% protein feed? 
    • A. 

      640 pounds

    • B. 

      560 pounds

    • C. 

      360 pounds

    • D. 

      None of these

    • E. 

      440 pounds

  • 16. 
    What is managing price or market risk by taking an opposite position in the futures market from that held in the cash market? 
    • A. 

      Basis

    • B. 

      Option

    • C. 

      Hedging

    • D. 

      Futures contract

  • 17. 
    Evans Farms delivered 48,620 lbs. of wheat to MidMO Farmers Elevator. How many bushels did they deliver? 
    • A. 

      486.2

    • B. 

      1519.4

    • C. 

      Wheat is not measured in bushels

    • D. 

      810.3

    • E. 

      868.2

  • 18. 
    Which one do you like?What is loan amortization? 
    • A. 

      Paying off debt with a varying repayment schedule

    • B. 

      The ability to get a loan from the bank

    • C. 

      Paying off debt with a fixed repayment schedule

    • D. 

      The ability to repay a loan from the bank

    • E. 

      Option 5

  • 19. 
    What is interest?
    • A. 

      The amount of money borrowed from the lender at the time of the loan origination

    • B. 

      The cost of borrowing money

    • C. 

      Half the principal

    • D. 

      The balance of the loan

  • 20. 
    If a producer decides to use the futures market to hedge corn he plans to sell at fall harvest, what would he do in the prior spring?
    • A. 

      Buy futures contracts expecting to buy more contracts when the corn is sold

    • B. 

      Sell futures contracts expecting to sell more contracts when the corn is sold

    • C. 

      Buy Futures contracts expecting to sell those contracts when the corn is sold

    • D. 

      Sell futures contracts expecting to buy those contracts back when the corn is sold

  • 21. 
    What is principal?
    • A. 

      The total amount of money you pay to the lender

    • B. 

      The actual amount of money borrowed  from the lender

    • C. 

      The present value of the money paid to the lender

    • D. 

      The amount of money left over

  • 22. 
    What is the length of time for the term on a machinery loan? 
    • A. 

      5-year property 

    • B. 

      7-year property

    • C. 

      10-year property

    • D. 

      Can be negotiated with the lender

  • 23. 
    The tax on gasoline is considered a/an:
    • A. 

      Business tax

    • B. 

      Excise tax

    • C. 

      Income tax

    • D. 

      None of these

    • E. 

      Property tax

  • 24. 
    What is a legally binding agreement made on a future exchange to buy or sell a commodity?
    • A. 

      Hedging

    • B. 

      Option

    • C. 

      Basis

    • D. 

      Futures contract

  • 25. 
    Which of the following is unnecessary information to calculate the time value of money? 
    • A. 

      Interest rate

    • B. 

      Stock market loss/gain

    • C. 

      Final investment value

    • D. 

      Length of time