Business Finance

Question 1

The decision to establish an __________ ____ is an important first step to accomplishing your financial goals.

Answer 1

investment plan

Question 2

common stocks and preferred stocks are two types of ______

Answer 2

stocks

Question 3

is a certain amount of money that can be obtained quickly in case of immediate need.

Answer 3

emergency fund

Question 4

fluctuate due to competition and movements in market prices.

Answer 4

Stock prices

Question 5

is the ease with which an asset can be converted to cash without substantial loss in peso value.

Answer 5

Liquidity

Question 6

generally receive interest payments every six months.

Answer 6

Bondholders

Question 7

is any type of asset that is acquired by an investor with the intent to utilize it to generate income and eventually accumulate wealth.

Answer 7

investment

Question 8

view investment as a monetary asset, like a bond, a stock or any type of financial instrument which is purchased and in due time will be sold, hopefully at a higher price.

Answer 8

Finance professionals

Question 9

It is the amount of money earned from investments.

Answer 9

Returns

Question 10

Are companies or trust funds that pool money from various investors through a fund manager, who in turn, invests that collected money in stocks, bonds, or a combination of various investments.

Answer 10

Managed Funds

Question 11

This means that investors who don’t have enough money can have the opportunity to buy different types of investments through pooling of funds of other investors.

Answer 11

Diversification

Question 12

Someone who invest in the stock of a business.

Answer 12

Shareholder

Question 13

The return that you would expect if you hold the bond for a year and is expressed in percentage.

Answer 13

Yield

Question 14

Earns minimal interest, easily withdrawable, least risky, insured with PDIC up to P500,000.

Answer 14

Investing in a Bank

Question 15

two types of investing in a bank

Answer 15

savings account
time deposit

Question 16

Like an IOU (I owe you) issued by a government or company with fixed interest rate-called coupon.

Answer 16

Investments in Bonds

Question 17

Like buying a small part of a company, earnings through dividends and capital gains as price increases.

Answer 17

Investments in Shares and Stocks

Question 18

An investment company, which pools the money of various investors and invest that money in bonds, stocks or a combination of various investments.

Answer 18

Managed Funds

Question 19

Can either be real property (real estate) or tangible personal property (gold, precious metals, artworks, etc.)

Answer 19

Investment in Property

Question 20

• A chance of loss
• In finance, it is the chance that the actual return would be different from expected.

Answer 20

Risks

Question 21

• risk management technique
• investor includes a wide variety of assets or investments

Answer 21

Diversification

Question 22

Types of Risks

Answer 22

Systematic Risk
Unsystematic Risk

Question 23

has effects that are wider in scope. It is impossible to avoid this risk

Answer 23

Systematic Risk

Question 24

affects only small assets

Answer 24

Unsystematic Risk

Question 25

Ways to Minimize Risks

Answer 25

1. Determination of tolerance to different kinds of risk
2. Conducting due diligence
3. Diversification of investment portfolio
4. Monitoring of investments
5. Taking advantage of government guaranteed investment products

Question 26

Two Factors

Answer 26

Net Worth
Risk Capital

Question 27

assets minus liabilities

Answer 27

Net Worth

Question 28

is money that, if lost on an investment, won’t impact the financial position and lifestyle.

Answer 28

Risk Capital

Question 29

involves managing all your resources to achieve your goals and objectives.

Answer 29

Money Management

Question 30

A term that covers managing your money as well as saving and investing.

Answer 30

Personal Finance

Question 31

Is the first step to creating wealth.

Answer 31

Organize Your Finances

Question 32

The best way to ensure that you either overcome debt or avoid it in the first place is to never spend more than you make.

Answer 32

Spend Less Than You Earn

Question 33

Take advantage of the time value of money.

Answer 33

Put Your Money to Work

Question 34

If you have to be in debt, stick to financing items that retain their value over time, like real estate and education

Answer 34

Limit Debt to Income-Producing Assets

Question 35

Understand why you are investing so that you will stick to your plan. Periodically gather research so you do not miss excellent investment opportunities.

Answer 35

Continuously Educate Yourself

Question 36

The key to understanding return on investments is that the more you risk, the better the return should be

Answer 36

Understand Risk

Question 37

Find creative ways to diversify your income. Everyone has a talent or special skill. “Turn your talents into a money-making opportunity”

Answer 37

Diversification Is Not Just for Investments

Question 38

Make sure you are taking advantage of all the ways benefits can save you money by reducing taxes or out-of-pocket expenses.

Answer 38

Maximize Your Employment Benefits

Question 39

We all know that any money you make is going to be taxed. That is why it is important to consider the related tax implications for every investment.

Answer 39

Pay Attention to Taxes

Question 40

Despite of your best efforts, you’ll face unforeseen emergencies.

Answer 40

Plan for the Unexpected

Question 41

What are the 10 basic principles of financial management?

Answer 41

1. Organize Your Finances
2. Spend Less Than You Earn
3. Put Your Money to Work
4. Limit Debt to Income-Producing Assets
5. Continuously Educate Yourself
6. Understand Risk
7. Diversification Is Not Just for Investments
8. Maximize Your Employment Benefits
9. Pay Attention to Taxes
10. Plan for the Unexpected