Learn About Funding Organization And Retail Investors

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1. High risk is equal to

Explanation

High risk is equal to high return because in the investment world, the potential for higher returns often comes with a higher level of risk. When an investment is considered high risk, it means that there is a greater chance of losing money. However, it also means that there is a possibility of earning higher returns if the investment is successful. This is because risk and reward are typically correlated, and investors are willing to take on more risk in the hopes of achieving greater gains.

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About This Quiz
Learn About Funding Organization And Retail Investors - Quiz

This quiz explores key financial concepts focusing on investment types, roles of venture capitalists, and retail investors. It also covers enterprise resource planning and derivatives markets, enhancing understanding of financial risk management and business process automation.

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2.
A market where ownership of securities are issued and subscribed is known as equity market. 

Explanation

The given answer, "Equity Markets," is correct because it accurately identifies the market where ownership of securities is issued and subscribed. In equity markets, individuals and institutional investors can buy and sell shares of publicly traded companies, allowing for the ownership and transfer of ownership in the form of equity or stocks. This market provides a platform for companies to raise capital by issuing shares and for investors to participate in the growth and profits of these companies.

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3. Any poarty that makes an investment

Explanation

An investor is someone who puts their money into a project, business, or financial product with the expectation of earning a profit. They take on the risk of their investment in exchange for potential returns. In this context, a lender typically provides funds to someone in need, expecting repayment with interest. A broker acts as an intermediary between buyers and sellers, facilitating transactions. While all three parties may have some involvement in investments, the term "investor" specifically refers to someone who actively seeks opportunities to grow their wealth through various investment avenues.

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4.
Foreign exchange markets, which facilitate the trading of foreign exchange.

Explanation

Foreign exchange markets are indeed responsible for facilitating the trading of foreign exchange. These markets provide a platform where individuals, businesses, and financial institutions can buy and sell different currencies. The exchange rates of currencies are determined in these markets based on supply and demand factors. Participants in the foreign exchange markets include banks, central banks, multinational corporations, governments, and individual traders. Therefore, the statement "Foreign exchange markets, which facilitate the trading of foreign exchange" is correct.

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5.
Financial regulation aims to maintain confident in the financial systems.

Explanation

Financial regulation aims to maintain confidence in the financial systems by implementing rules and regulations that promote stability, transparency, and fairness. These regulations help safeguard against fraud, manipulation, and excessive risk-taking, which can undermine the integrity of the financial system. By ensuring that financial institutions operate in a responsible and accountable manner, financial regulation helps to protect investors, consumers, and the overall economy from potential harm. Therefore, it is true that financial regulation aims to maintain confidence in the financial systems.

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6.
temporarily gives money to somebody else, on the condition of getting back the principal amount together with some interest/profit or charge.

Explanation

The given answer, "Lenders," is correct because lenders are the ones who temporarily give money to somebody else, on the condition of getting back the principal amount together with some interest/profit or charge. Lenders can be individuals, banks, or other financial institutions that provide funds to borrowers in exchange for repayment with interest. They play a crucial role in the economy by facilitating borrowing and investment activities.

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7.
is the process of estimating what something is worth.

Explanation

Valuation is the process of estimating the worth or value of something. In this context, it refers to determining the value of something, such as an asset, company, or investment. Valuation is important in various financial and investment activities, including determining the fair price of a stock, assessing the value of a business for acquisition or sale, or determining the value of assets for accounting purposes. It involves analyzing various factors, such as market conditions, financial performance, and future prospects, to arrive at an estimated value.

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8. State owned investment fund

Explanation

A sovereign wealth fund is a state-owned investment fund that is created by a country's government to manage and invest its surplus funds. These funds are typically derived from revenues generated by the country's natural resources, such as oil or gas. Sovereign wealth funds are used to invest in various financial assets, both domestically and internationally, with the goal of generating long-term returns and preserving wealth for future generations. Unlike hedge funds and mutual funds, which are privately owned and managed, sovereign wealth funds are directly controlled by the government. They play a significant role in stabilizing the economy and supporting strategic investments in key industries.

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9.
Cutoff time point in the business day before which electronic payments, such as Federal Reserve Fed Wire transfers or Automated Clearing House (ACH) entries, must be submitted to a processing bank for entry into the interbank clearing system.

Explanation

The statement is true. The cutoff time point refers to the specific time before which electronic payments must be submitted to a processing bank for entry into the interbank clearing system. This ensures that the payments are processed and cleared within the same business day.

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10.
A checking account in which a balance of zero is maintained by automatically transferring funds from a master account in an amount only large enough to cover checks presented.

Explanation

A zero-balance account is a type of checking account where the balance is maintained at zero by automatically transferring funds from a master account. This is done in an amount that is only large enough to cover the checks that are presented. This type of account is useful for businesses or individuals who want to ensure that they do not accidentally overdraw their account. By automatically transferring funds as needed, they can avoid overdraft fees and maintain a zero balance.

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11.
Types of investor that is financially sophisticated and makes large investment.

Explanation

An institutional investor is a type of investor that is financially sophisticated and typically makes large investments. Unlike retail investors who invest smaller amounts of money, institutional investors have a significant amount of capital to invest and often have access to advanced investment strategies and opportunities. They include entities such as pension funds, insurance companies, mutual funds, and hedge funds. Institutional investors often have a team of professionals who analyze investment opportunities and make investment decisions on behalf of the organization.

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12.
Fund raising is the process of gathering voluntary contributions of money or other resources, by requesting donations from individuals, businesses, charitable foundations, or governmental agencies 

Explanation

Fundraising is indeed the process of collecting voluntary contributions of money or other resources by requesting donations from various sources such as individuals, businesses, charitable foundations, or governmental agencies.

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13.
Financial Stability is contributing the prosecution and enhancement of the firm

Explanation

The statement suggests that financial stability plays a role in supporting and improving the firm's prosecution and enhancement. This implies that when a firm is financially stable, it is better equipped to handle legal matters and invest in its growth and development. Financial stability provides a solid foundation for the firm to operate smoothly and make strategic decisions that can contribute to its success.

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14.
is a form of company charge card that allows goods and services to be procured without using a traditional purchasing process.

Explanation

A procurement card is a type of company charge card that enables the purchase of goods and services without going through the usual purchasing process. This card streamlines the procurement process by allowing authorized employees to directly make purchases, eliminating the need for traditional purchasing methods such as purchase orders or invoices.

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15.
is the act of providing financial resources, usually in the form of money, or other values such as effort or time, to finance a need, program, and project, usually by an organization or government. 

Explanation

Funding refers to the act of providing financial resources, usually in the form of money or other values such as effort or time, to finance a need, program, or project. This can be done by an organization or government.

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16.
is any party that makes an Investment.

Explanation

The correct answer is "Investor" because an investor refers to any party that makes an investment, regardless of the type or size of the investment. This term can encompass various types of investors such as venture capitalists and retail investors. Therefore, option 4 is the correct answer.

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17.
is business process management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions related to technology, services and human resources.

Explanation

Enterprise resource planning (ERP) is the correct answer because it is a type of business process management software that helps organizations manage their business operations and automate various back-office functions. ERP systems integrate different applications across departments, such as finance, human resources, and technology, to streamline processes and improve overall efficiency. This software enables businesses to have a centralized system for managing resources, data, and operations, leading to better decision-making and productivity. Venture capitalists, derivatives markets, and option 4 are unrelated to the given explanation.

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18. Is the proportional increase/decrease in risk investors.

Explanation

The term "Risk Return trade off" refers to the relationship between the level of risk associated with an investment and the potential return that can be achieved. It suggests that as the level of risk increases, the potential return also increases. This concept is important for investors as it helps them make informed decisions by considering the potential rewards in relation to the risks involved.

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19.
refers to a broad area of finance involving the collection, handling, and usage of cash. It involves assessing market liquidity, cash flow, and investments.

Explanation

Cash management refers to the broad area of finance involving the collection, handling, and usage of cash. This includes activities such as assessing market liquidity, managing cash flow, and making investments. The other options, including fixed income exchange and junk bonds, do not accurately describe the concept of cash management. Therefore, the correct answer is cash management.

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20.
is a planning tool that helps you anticipate the flow of cash in and out of your business, allowing you to project your cash needs and evaluate your company's liquidity position.

Explanation

Cash forecasting is a planning tool that helps businesses anticipate the flow of cash in and out of their operations. By projecting cash needs and evaluating liquidity, cash forecasting enables businesses to effectively manage their finances. It allows businesses to plan for future expenses, assess their ability to meet financial obligations, and make informed decisions about cash management.

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21.
A managerial accounting strategy focusing on maintaining efficient levels of both components of working capital, current assets and current liabilities, in respect to each other.

Explanation

Working capital management refers to the strategy of effectively managing both current assets and current liabilities in order to maintain efficient levels. This involves ensuring that the company has enough cash flow to meet its short-term obligations while also optimizing the use of its current assets, such as inventory and accounts receivable. By effectively managing working capital, a company can improve its liquidity position, reduce costs, and enhance overall financial performance. Therefore, working capital management is the most appropriate answer in this context.

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22.
Act is a federal law that deals with almost all parts of the marketplace including unfair market practices, product safety, price monitoring and industry codes of practice

Explanation

The given correct answer is "Trading Practice." This is because the Act mentioned in the question is a federal law that deals with various aspects of the marketplace, including unfair market practices. Trading practices are a crucial part of the marketplace and can involve activities such as insider trading, market manipulation, or fraudulent practices. Therefore, it is reasonable to assume that the Act would cover trading practices as one of its areas of focus.

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23.
Corporate bonds are characterized by higher yields because there is a higher risk of a company defaulting than a government.

Explanation

Corporate bonds are characterized by higher yields because companies generally have a higher risk of defaulting compared to governments. This is because governments have the ability to raise taxes or print money to meet their debt obligations, while companies rely on their profitability and cash flow. Therefore, investors demand higher yields on corporate bonds to compensate for the higher risk involved.

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24.
is a contractual agreement between a bank, known as the issuing bank, on behalf of one of its customers, authorizing another bank, known as the advising or confirming bank, to make payment to the beneficiary.

Explanation

A letter of credit is a contractual agreement between a bank, known as the issuing bank, and another bank, known as the advising or confirming bank, to make payment to the beneficiary. This agreement is made on behalf of one of the issuing bank's customers. The letter of credit serves as a guarantee of payment to the beneficiary, providing assurance that they will receive the agreed-upon funds.

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25.
a short-dated government security, yielding no interest but issued at a discount on its redemption price.

Explanation

A Treasury bill is a short-term government security that is issued at a discount and does not pay any interest. It is typically used by governments to raise funds quickly. The investor purchases the Treasury bill at a price lower than its face value and receives the full face value when the bill matures. This allows the government to effectively borrow money from investors for a short period of time.

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26.
Involves buying, holding, selling and short selling of stocks, bonds, commodities, currencies, collectibles, real estate derivatives or any valuable financial instruments.

Explanation

The given correct answer is "Speculations". This is because speculations involve buying, holding, selling, and short selling of various financial instruments such as stocks, bonds, commodities, currencies, collectibles, real estate derivatives, or any valuable assets. Speculators engage in these activities with the intention of making a profit by predicting price movements and taking advantage of market fluctuations.

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27.
Retained Earnings are an easy source of internal financing to use because they are liquid assets.

Explanation

Retained earnings are an easy source of internal financing to use because they are liquid assets. This means that they can be readily converted into cash if needed. Unlike external financing options such as loans or issuing new shares, retained earnings do not involve any additional costs or obligations. They are funds that have been generated and kept within the company from its past profits. Therefore, using retained earnings as a source of financing is a convenient and cost-effective option for businesses.

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28.
Availability Float is the time between when a check is deposited and when the funds are available to the recipient.

Explanation

Availability float refers to the time it takes for funds from a deposited check to become available to the recipient. This includes the processing time required by the bank to verify and clear the check. Therefore, the given statement is true as it accurately defines availability float.

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29.
Is the art and science of making decisions about investment to objective, asset allocation for individuals or institutions and balancing risk agaist performance.

Explanation

Portfolio management refers to the art and science of making decisions about investment objectives, asset allocation, and balancing risk against performance. It involves managing a collection of investments, known as a portfolio, for individuals or institutions. This includes selecting and monitoring investments, adjusting the portfolio's asset allocation, and making decisions based on market conditions and the investor's goals. Portfolio management aims to maximize returns while minimizing risk, and it can be done through various approaches such as passive management or active management.

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30.
Trading at the FIE starts from ______ and ends at ______.

Explanation

The trading at the FIE starts at 9 am and ends at 4 pm.

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31.
Return comprises of any change in value and interest or dividends or such cash flow.

Explanation

The explanation for the given correct answer is that a return refers to any change in value or cash flow received from an investment, including interest or dividends. Therefore, it can be concluded that the statement "Return comprises of any change in value and interest or dividends or such cash flow" is true.

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32.
is an investor, such as a bank, insurance company, retirement fund, hedge fund, or mutual fund, that is financially sophisticated and makes large investments, often held in very large portfolios of investments.

Explanation

An institutional investor is a financially sophisticated investor who makes large investments and holds them in very large portfolios. This type of investor can include banks, insurance companies, retirement funds, hedge funds, and mutual funds. They have the expertise and resources to analyze and manage complex investments, making them an important player in the financial markets.

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33.
is a comprehensive financial market infrastructure that aims to provide an electronic platform for trading, clearing and settlement, and depository and custodianship fixed-income securities and its derivatives. 

Explanation

The correct answer is "Fixed Income Exchange" because it is a financial market infrastructure that provides a platform for trading, clearing, and settling fixed-income securities and its derivatives. This platform aims to facilitate the electronic trading and management of these securities, including junk bonds. It also offers services such as cash management. Option 4 is not a valid answer as it does not relate to the given explanation.

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34.
also known as a "high-yield bond" or "speculative bond," is a bond rated "BB" or lower because of its high default risk.

Explanation

A "junk bond" is a bond that is rated "BB" or lower due to its high default risk. It is also known as a "high-yield bond" or "speculative bond." Junk bonds have a higher risk of default compared to investment-grade bonds, but they also offer higher yields to compensate for the increased risk. This makes them attractive to investors seeking higher returns. The term "junk bonds" accurately describes bonds with a lower credit rating and higher default risk.

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35.
Entity involve in the provision of goods investment and management of capital

Explanation

Investment Trust is the correct answer because it is an entity that is involved in the provision of goods, investment, and management of capital. Investment trusts pool money from multiple investors and use it to invest in a diversified portfolio of assets such as stocks, bonds, and real estate. They are managed by professional fund managers who make investment decisions on behalf of the trust's shareholders. Investment trusts provide investors with the opportunity to gain exposure to a wide range of investments and benefit from professional management.

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36.
Company stock with dividends that are paid to shareholders before common stock dividends are paid out.

Explanation

Preference shares are a type of company stock that entitles the shareholders to receive dividends before common stockholders. This means that when a company pays out dividends, preference shareholders will be the first to receive their payments. This preference gives preference shareholders a higher priority in receiving dividends compared to common shareholders. Therefore, preference shares align with the given description of a company stock with dividends that are paid to shareholders before common stock dividends are paid out.

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37.
Creation of the exchange was spearheaded by Banker's association of the Philippines.

Explanation

The statement indicates that the creation of the exchange was led by the Banker's Association of the Philippines. This suggests that the statement is true, as it implies that the association played a significant role in initiating the establishment of the exchange.

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38.
The fixed income exchanges infrastructure was launched in 2005.

Explanation

The statement is true because the fixed income exchanges infrastructure was indeed launched in 2005. This suggests that the infrastructure for trading fixed income securities, such as bonds and treasury bills, was established in 2005, providing a platform for investors to buy and sell these types of assets.

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39.
a service provided by a bank, whereby the bank receives, processes, and deposits all of a company's receivables.

Explanation

A lockbox is a service provided by a bank where the bank receives, processes, and deposits all of a company's receivables. This means that when customers make payments to the company, the payments are sent directly to the bank's lockbox address. The bank then collects and processes the payments, depositing them into the company's account. This service helps companies streamline their receivables process and improve cash flow by reducing the time and effort required to process and deposit payments.

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40.
is an individual investor possessing shares of a given security. Retail investors can be further divided into two categories of share ownership.

Explanation

The correct answer is "Retail investor" because the given statement describes an individual investor who owns shares of a security. This individual is classified as a retail investor, which means they are investing their own personal funds rather than institutional funds. The other options (Venture Capitalists and Investor) do not accurately describe an individual investor with shares of a security.

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41.
also known as "redeemable bonds," can be redeemed by the issuer prior to maturity

Explanation

Callable bonds, also known as "redeemable bonds," can be redeemed by the issuer prior to maturity. This means that the issuer has the option to call back the bonds and pay off the bondholders before the scheduled maturity date. This feature provides flexibility to the issuer in case interest rates decline or if they want to refinance the debt at a lower rate. It also allows the issuer to reduce their interest expense.

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42. Which one do you like?
is a funding organization that typically gets involved in companies that have already shown a history of returns.

Explanation

Venture capitalists are a type of funding organization that typically invest in companies that have already demonstrated a history of returns. They provide funding to startups and early-stage companies in exchange for equity or ownership stakes. This type of investment is often considered high-risk, high-reward, as venture capitalists seek companies with high growth potential. Retail investors, on the other hand, are individual investors who invest their personal funds in the stock market or other financial instruments. Therefore, the correct answer is venture capitalists.

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43.
Speculation or agiotage  represents one of three market roles in western financial markets, distinct from hedging, long term investing and arbitrage. Speculators in an asset may have no intention to have long term exposure to that asset.

Explanation

The statement is true because speculation or agiotage is indeed one of the market roles in western financial markets. Speculators engage in short-term buying and selling of assets with the intention of profiting from price fluctuations. Unlike long-term investors, speculators do not have the intention of holding the asset for an extended period. Therefore, the statement accurately describes the role of speculators in financial markets.

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44.
Treasurer a person appointed to administer or manage the financial assets and liabilities of a society, company, local authority, or other body

Explanation

A treasurer is indeed a person who is appointed to handle the financial assets and liabilities of a society, company, local authority, or any other organization. They are responsible for managing the financial resources, making financial decisions, and ensuring the proper utilization of funds. Their role is crucial in maintaining the financial stability and transparency of the organization. Therefore, the statement "True" accurately describes the role and responsibilities of a treasurer.

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45.
Lifting Fee is the time required for a check payment to travel from the payer to the payee through the postal system.

Explanation

The statement is false because the lifting fee is not related to the time required for a check payment to travel through the postal system. The lifting fee is actually a charge or fee imposed by a bank or financial institution for processing a check or other payment instrument. It is typically deducted from the amount of the payment before it is deposited into the payee's account.

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46.
Availability float is the combination of the mail float, processing float, and availability float, and so represents the full duration of all types of check payment float

Explanation

The given statement is false. Availability float is not the combination of mail float, processing float, and availability float. Availability float refers to the time period during which funds are available for use after a check or payment has been deposited. It does not include mail float or processing float, which are separate components of check payment float.

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47. It is the price per share at which convertible security can be converted into common stock

Explanation

The given correct answer is "Conversion Price." This is the price per share at which a convertible security can be converted into common stock. When an investor holds a convertible security, they have the option to convert it into a predetermined number of common stock shares at the conversion price. This conversion price is set at the time of issuance of the convertible security and allows the investor to benefit from any potential increase in the value of the common stock.

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48. Alternative investment using pooled funds that may use strategies

Explanation

Hedge funds are a type of alternative investment that pool funds from multiple investors and use various investment strategies. Unlike mutual funds, hedge funds are not regulated by the same strict rules and regulations, allowing them to employ more complex and high-risk investment strategies. Hedge funds often aim to generate high returns by taking advantage of market inefficiencies and using techniques such as short selling, leverage, and derivatives. They are typically only available to accredited investors due to their higher risk profile.

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49.
Calculated by multiplying the common stock price by the conversion ratio

Explanation

The conversion value is calculated by multiplying the common stock price by the conversion ratio. This is a measure used in convertible securities to determine the value of the security if it were converted into common stock. It represents the value that an investor would receive if they were to convert their convertible security into common stock at the current market price.

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50.
are electronic payments that are created when the customer gives an originating institution, corporation, or other customer (originator) authorization to debit directly from the customer's checking or saving account for the purpose of bill payment.

Explanation

ACH payments are electronic payments that are created when the customer gives authorization to debit directly from their checking or savings account for the purpose of bill payment. The Automated Clearing House (ACH) is the system that facilitates these electronic payments. Cash payments, on the other hand, involve physically handing over cash as a form of payment. Therefore, the correct answer is ACH payments.

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51. Is spreading of risk and reward within an asset class

Explanation

Diversification refers to the practice of spreading investments across different assets within the same asset class. It involves investing in a variety of securities, such as stocks, bonds, and commodities, to reduce the risk of loss. By diversifying, investors can potentially offset losses in one investment with gains in another, thereby minimizing the overall volatility of their portfolio. This strategy allows for the potential to achieve both risk mitigation and reward optimization within a specific asset class.

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52.
is an electronic network for financial transactions in the United States. It processes large volumes of credit and debit transactions in batches. It credit transfers include direct deposit, payroll and vendor payments.

Explanation

The given correct answer is ACH - Automated Clearing House. This is because the description provided matches the characteristics of the ACH system. The ACH is an electronic network that processes credit and debit transactions in batches, including direct deposits, payroll, and vendor payments. It is widely used for financial transactions in the United States.

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53.
firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors.

Explanation

The given statement suggests that the firm raises money for working capital or capital expenditures by selling bonds, bills, or notes to individual and/or institutional investors. This is known as debt financing, which involves borrowing money from investors and promising to repay it with interest over a specified period of time. Debt financing allows the firm to access the necessary funds without diluting ownership or control of the company. It is a common method used by companies to raise capital for various purposes.

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54. One of the most common uses of bonds is.

Explanation

Bonds are commonly used for preserving principal because they are considered a relatively safe investment. When an individual or organization invests in bonds, they are essentially lending money to the issuer in exchange for regular interest payments and the return of the principal amount at maturity. Unlike stocks or other investments, bonds have a fixed maturity date and a predetermined interest rate, providing investors with a predictable income stream and the assurance that their initial investment will be returned. This makes bonds an attractive option for those looking to protect their principal and minimize risk.

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55.
are direct transfer payments of money to eligible people, are usually provided by the state and federal government.

Explanation

Cash payments are direct transfer payments of money to eligible people. They are usually provided by the state and federal government. ACH payments, on the other hand, refer to Automated Clearing House payments, which are electronic transfers of funds between banks. While ACH payments may also involve the transfer of money to eligible people, the given statement specifically mentions "cash payment" as the correct answer.

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56.
are standard shares with no special rights or restrictions. They have the potential to give the highest financial gains, but also have the highest risk.

Explanation

Ordinary shares are standard shares that do not have any special rights or restrictions. They are the most common type of shares and offer the potential for high financial gains. However, they also come with the highest risk, as their value can fluctuate based on market conditions. Therefore, ordinary shares are considered to be the answer because they align with the description provided in the question.

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57.
Market Security is a market in which people trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. 

Explanation

The explanation for the answer being false is that the given definition of Market Security is incorrect. Market Security refers to the measures and systems put in place to protect the integrity of financial markets, such as regulations, surveillance, and enforcement. It does not directly involve the trading of financial securities or commodities.

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58.
Market Structure is the number of firms producing identical products which are homogeneous.

Explanation

The statement correctly defines market structure as the number of firms producing identical products that are homogeneous. In a market with perfect competition, there are many firms producing the same product, leading to a homogeneous market. Therefore, the statement is true.

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59.
Company or individual that initiates an ACH transaction according to an arrangement with a Receiver is the Manager

Explanation

The correct answer is False. The company or individual that initiates an ACH transaction according to an arrangement with a Receiver is not the Manager. The Manager is typically the financial institution that manages the ACH transactions on behalf of the company or individual.

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60.
which provide instruments for the management of financial risk.

Explanation

Derivatives markets provide instruments for the management of financial risk. These markets allow investors to trade financial contracts whose value is derived from an underlying asset, such as stocks, bonds, commodities, or currencies. By using derivatives, investors can hedge against potential losses or speculate on price movements. This helps them manage their exposure to various types of risks, such as market volatility, interest rate fluctuations, or currency exchange rate changes. Therefore, derivatives markets are crucial for risk management in the financial industry.

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61. Involves a single manager, co-managers or a group of managers who attempt to beat the market return through investment decision based on research and decision on individual holdings.

Explanation

Active management involves a single manager, co-managers, or a group of managers who attempt to beat the market return through investment decisions based on research and individual holdings. This means that the managers actively select and manage investments in order to outperform the market, rather than simply tracking a benchmark index. Passive management, on the other hand, involves tracking a specific index and not actively making investment decisions. Portfolio management refers to the overall management of a portfolio of investments, which can be done through either active or passive management strategies.

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62. Tracks a market index commonly referred to as indexing or index investing.

Explanation

Passive management refers to an investment strategy that aims to replicate the performance of a specific market index, such as the S&P 500, rather than actively selecting individual investments. This approach typically involves low portfolio turnover and lower fees compared to active management. By tracking an index, passive management provides broad market exposure and avoids the need for constant buying and selling decisions. Therefore, the given answer, Passive Management, accurately describes the strategy of tracking a market index commonly referred to as indexing or index investing.

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63.
is a funding organization that typically gets involved in companies that have already shown a history of returns.

Explanation

Venture capitalists are a type of funding organization that typically invests in companies that have already demonstrated a track record of generating returns. They provide financial support to startups or early-stage companies that show potential for growth and profitability. Unlike other options such as enterprise resource planning (ERP) or derivatives markets, venture capitalists specifically focus on investing in companies with proven success and growth potential.

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64.
Based on the understanding that different assets do not move in concert and some are more volatile than others

Explanation

Asset allocation refers to the strategy of dividing an investment portfolio among different asset classes, such as stocks, bonds, and cash, based on the understanding that different assets do not move in concert and some are more volatile than others. By diversifying across different asset classes, investors can reduce the overall risk of their portfolio and potentially increase returns. Rebalancing, on the other hand, involves periodically adjusting the allocation of assets in a portfolio to maintain the desired level of risk and return. Both asset allocation and rebalancing are important techniques used by investors to manage their portfolios effectively.

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65. A method used to return a portfolio to its original target allocation at annual intervals

Explanation

Rebalancing is the correct answer because it refers to the process of adjusting the portfolio back to its original target allocation. This is typically done on an annual basis to ensure that the portfolio remains aligned with the investor's desired asset allocation. By rebalancing, the investor can maintain the desired level of diversification and manage risk effectively.

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66. These are close end funds and constituted as public limited companies

Explanation

The given correct answer is "Investment fund". This is because investment funds are a type of financial institution that pools money from multiple investors to invest in a diversified portfolio of securities. They can be structured as close-end funds, which have a fixed number of shares and are traded on stock exchanges, or as public limited companies, which are incorporated entities with shares traded on stock markets. Therefore, the statement suggests that the funds mentioned (sovereign fund and mutual fund) are both examples of investment funds.

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67.
may be redeemed for a predetermined amount of the company's equity at certain times during its life, usually at the discretion of the bondholder.

Explanation

Convertible bonds are a type of bond that can be converted into a predetermined amount of the company's equity at certain times during its life. This conversion is usually at the discretion of the bondholder. This means that the bondholder has the option to convert their bond into equity if they choose to do so. This feature provides the bondholder with the potential for additional returns if the company's stock price increases, making convertible bonds an attractive investment option for some investors.

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68.
Investor Managements an electronic network for financial transactions in the United States. ACH processes large volumes of credit and debit transactions in batches. ACH credit transfers include direct deposit, payroll and vendor payments.

Explanation

The statement is false because ACH (Automated Clearing House) does not manage an electronic network for financial transactions in the United States. Instead, ACH is a system that facilitates the processing of large volumes of credit and debit transactions in batches. It is used for various types of transactions, including direct deposit, payroll, and vendor payments.

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69.
Finance Manager is a corporate officer primarily responsible for managing the financial risks of the corporation. This officer is also responsible for financial planning and record-keeping, as well as financial reporting to higher management.

Explanation

The given statement is false because a Finance Manager is not primarily responsible for managing the financial risks of the corporation. While they do play a role in managing financial risks, their primary responsibilities include financial planning, record-keeping, and financial reporting to higher management. Managing financial risks is typically the responsibility of a Risk Manager or a Chief Risk Officer.

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70. Is the money amount the bond will worth at its maturity

Explanation

The face value refers to the nominal value or the principal amount of a bond, which is the amount that the bond will be worth at its maturity. It is the amount that the issuer of the bond promises to repay to the bondholder when the bond reaches its maturity date.

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71. Match the following
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High risk is equal to
A market where ownership of securities are issued and subscribed is...
Any poarty that makes an investment
Foreign exchange markets, which facilitate the trading of foreign...
Financial regulation aims to maintain confident in the financial...
Temporarily gives money to somebody else, on the condition of getting...
Is the process of estimating what something is worth.
State owned investment fund
Cutoff time point in the business day before which electronic...
A checking account in which a balance of zero is maintained by...
Types of investor that is financially sophisticated and makes large...
Fund raising is the process of gathering voluntary contributions of...
Financial Stability is contributing the prosecution and enhancement of...
Is a form of company charge card that allows goods and services to be...
Is the act of providing financial resources, usually in the form of...
Is any party that makes an Investment.
Is business process management software that allows an organization to...
Is the proportional increase/decrease in risk investors.
Refers to a broad area of finance involving the collection, handling,...
Is a planning tool that helps you anticipate the flow of cash in and...
A managerial accounting strategy focusing on maintaining efficient...
Act is a federal law that deals with almost all parts of the...
Corporate bonds are characterized by higher yields because there is a...
Is a contractual agreement between a bank, known as the issuing bank,...
A short-dated government security, yielding no interest but issued at...
Involves buying, holding, selling and short selling of stocks, bonds,...
Retained Earnings are an easy source of internal financing to use...
Availability Float is the time between when a check is deposited and...
Is the art and science of making decisions about investment to...
Trading at the FIE starts from ______ and ends at ______.
Return comprises of any change in value and interest or dividends or...
Is an investor, such as a bank, insurance company, retirement fund,...
Is a comprehensive financial market infrastructure that aims to...
Also known as a "high-yield bond" or "speculative...
Entity involve in the provision of goods investment and management of...
Company stock with dividends that are paid to shareholders before...
Creation of the exchange was spearheaded by Banker's association of...
The fixed income exchanges infrastructure was launched in 2005.
A service provided by a bank, whereby the bank receives, processes,...
Is an individual investor possessing shares of a given security....
Also known as "redeemable bonds," can be redeemed by the...
Which one do you like?is a funding organization that typically gets...
Speculation or agiotage  represents one of three market roles in...
Treasurer a person appointed to administer or manage the financial...
Lifting Fee is the time required for a check payment to travel from...
Availability float is the combination of the mail float, processing...
It is the price per share at which convertible security can be...
Alternative investment using pooled funds that may use strategies
Calculated by multiplying the common stock price by the conversion...
Are electronic payments that are created when the customer gives an...
Is spreading of risk and reward within an asset class
Is an electronic network for financial transactions in the United...
Firm raises money for working capital or capital expenditures by...
One of the most common uses of bonds is.
Are direct transfer payments of money to eligible people, are usually...
Are standard shares with no special rights or restrictions. They have...
Market Security is a market in which people trade financial...
Market Structure is the number of firms producing identical products...
Company or individual that initiates an ACH transaction according to...
Which provide instruments for the management of financial risk.
Involves a single manager, co-managers or a group of managers who...
Tracks a market index commonly referred to as indexing or index...
Is a funding organization that typically gets involved in companies...
Based on the understanding that different assets do not move in...
A method used to return a portfolio to its original target allocation...
These are close end funds and constituted as public limited companies
May be redeemed for a predetermined amount of the company's equity...
Investor Managements an electronic network for financial transactions...
Finance Manager is a corporate officer primarily responsible for...
Is the money amount the bond will worth at its maturity
Match the following
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