Farm Management Exam: MCQ Quiz!

40 Questions | Total Attempts: 342

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Farm Management Exam: MCQ Quiz!

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Questions and Answers
  • 1. 
    The difference between the local cash market and the futures market is called the 
    • A. 

      Average

    • B. 

      Basis

    • C. 

      Contract

    • D. 

      Deduction

    • E. 

      None of the above

  • 2. 
    Which of the following land characteristics is used to determine an agricultural land's value for Missouri property tax calculations?
    • A. 

      The slope of the land

    • B. 

      The erosion of potential land

    • C. 

      The color of the soil

    • D. 

      The productivity potential of the land 

    • E. 

      All of the above

  • 3. 
    How many square feet are in an acre?
    • A. 

      5,280

    • B. 

      12,250

    • C. 

      43,560

    • D. 

      100,000

    • E. 

      None of the above

  • 4. 
    A firm should shut down in the short-run if it can not cover its 
    • A. 

      Fixed cost

    • B. 

      Total cost

    • C. 

      Variable cost

    • D. 

      Time cost

    • E. 

      Overhead costs

  • 5. 
    When an increase in production of one enterprise causes a reduction in the production of another enterprise, the two enterprises are said to be:
    • A. 

      Independent

    • B. 

      Complementary

    • C. 

      Supplementary

    • D. 

      Competitive

    • E. 

      None of the above

  • 6. 
    Missouri agricultural land productivity values are set by:
    • A. 

      An average of current agricultural land sales

    • B. 

      Using the values set at the federal level

    • C. 

      Using 83.3% of Iowa's values

    • D. 

      The Missouri State Tax Commission

    • E. 

      None of the above

  • 7. 
    How many bushels are in a corn futures contract?
    • A. 

      1,000

    • B. 

      3,000

    • C. 

      5,000

    • D. 

      7,000

    • E. 

      None of the above

  • 8. 
    The money on deposit to ensure the performance of a futures contract is called
    • A. 

      Basis

    • B. 

      Commission

    • C. 

      Margin

    • D. 

      Premium

    • E. 

      None of the above

  • 9. 
    The demand curve shows the relationship between:
    • A. 

      Consumer tastes and quantity demand

    • B. 

      Price in the quantity demand

    • C. 

      Price in production cost

    • D. 

      Money income and quantity demand

    • E. 

      None of the above

  • 10. 
    A farmer has total assets of $400,000 of which land is $300,000.  The farmer's debt: equity ratio is 3:1.  What will the farmer's debt: equity ratio be if his land goes up in value by 15%?
    • A. 

      0.75

    • B. 

      0.92

    • C. 

      1.18

    • D. 

      2.07

    • E. 

      2.45

  • 11. 
    The process of finding the future value of a present sum is called:
    • A. 

      Amortizing

    • B. 

      Budgeting

    • C. 

      Compounding

    • D. 

      Discounting

    • E. 

      None of the above

  • 12. 
    John invested $4,000 of retirement savings in a load mutual fund.  The expected annual rate of return is 6%.  How many years will it take for the $4,000 to double?  Utilize the Rule of 72 when calculating the answer.
    • A. 

      3

    • B. 

      6

    • C. 

      9

    • D. 

      12

    • E. 

      None of the above

  • 13. 
    An upward trend of market prices is referred to as a
    • A. 

      Bear market

    • B. 

      Bull market

    • C. 

      Boar market

    • D. 

      Buck market

    • E. 

      None of the above

  • 14. 
    Farmer Smith has a debt-to-asset ratio of 55%.  His debt-to-equity ratio must be
    • A. 

      Negative

    • B. 

      45%

    • C. 

      Less than 100%

    • D. 

      Less than 25%

    • E. 

      Greater than 100%

  • 15. 
    Which of the following would cause an increase in the price of an agricultural commodity?
    • A. 

      An increase in supply and a decrease in demand

    • B. 

      A decrease in supply with no change in demand

    • C. 

      A decrease in demand with no change in supply

    • D. 

      All of the above would cause price to increase

    • E. 

      None of the above

  • 16. 
    The selling of a commodity futures contract to protect a producer from price fluctuations in the market place at the time the product is sold is called:
    • A. 

      Hedging

    • B. 

      Hedger to arrive

    • C. 

      Intrinsic value

    • D. 

      Put option

    • E. 

      None of the above

  • 17. 
    In Missouri which of the following is not taxed as personal property:
    • A. 

      Calves between 300-600 pounds

    • B. 

      Sows

    • C. 

      Grain stored on farm premises

    • D. 

      Horses

    • E. 

      None of the above

  • 18. 
    The best indication that a farmer is making financial progress year-to-year is 
    • A. 

      An increase in net worth on the balance sheet

    • B. 

      A decrease in the value of total liabilities on the balance sheet

    • C. 

      An increase in the value of total assets on the balance sheet

    • D. 

      An increase of total cash flow on the cash flow statement

    • E. 

      A decrease in the value of his non-current liabilities

  • 19. 
    The ability of larger firms to be more profitable than smaller firms in the same industry is an example of:
    • A. 

      Diminishing returns

    • B. 

      Imperfect competition

    • C. 

      Inelastic supply

    • D. 

      Economies of scale

    • E. 

      None of the above

  • 20. 
    The person who makes transactions for farmers hedging is
    • A. 

      An accountant

    • B. 

      A broker

    • C. 

      A banker

    • D. 

      A commissioner

    • E. 

      None of the above

  • 21. 
    The best measure of a firm's ability to make a short-term loan payment is
    • A. 

      Debt/asset ratio

    • B. 

      Current ratio

    • C. 

      Solvency ratio

    • D. 

      Leverage ratio

    • E. 

      Net capital ratio

  • 22. 
    If the price of a commodity increases by 5% and the quantity purchased decreases by 10%, then the demand for this commodity is:
    • A. 

      Upward sloping

    • B. 

      Inelastic

    • C. 

      Elastic

    • D. 

      Unitary

    • E. 

      Unstable

  • 23. 
    To provide protection against wind damage to the farm home, a person should purchase
    • A. 

      Life insurance

    • B. 

      Property insurance

    • C. 

      Accident and health insurance

    • D. 

      Liability insurance

    • E. 

      None of the above

  • 24. 
    To purchase insurance, a person pays a/an
    • A. 

      Deductible

    • B. 

      Indemnity

    • C. 

      Loss

    • D. 

      Premium

    • E. 

      None of the above

  • 25. 
    The _________ tax is often referred to as the "death tax".
    • A. 

      Excise

    • B. 

      Medicare

    • C. 

      Estate

    • D. 

      Property

    • E. 

      None of the above