(M) Chapter 11: Financial Preparation for Entrepreneurial Ventures

Question 1

Used for safekeeping personal cash and earn (minimal) interest

Answer 1

Bank Accounts: Certificate of Deposit

Question 2

Instrument for banks to acquire business capital and/or for further investment

Answer 2

Bank Accounts: Certificate of Deposit

Question 3

What are the types of bank accounts?

Answer 3

Savings Account
Checking or Current Account
Time Depositit
Hybrid accounts (premium accounts)

Question 4

Minimum Deposit/ADB for Savings

Answer 4

0, ₱500, ₱1000

Question 5

Minimum Deposit/ADB for Checking

Answer 5

₱10,000

Question 6

Minimum Deposit/ADB for Time Deposit Acc?

Answer 6

₱50k, ₱100k, ₱500k, ₱1M, ₱2M

Question 7

Annual Interest Earned for Savings

Answer 7

0.25%, 0.5%, 1%, 1.25%, 1.5%

Question 8

Annual Interest Earned for Checking

Answer 8

0 for most banks

Question 9

Annual Interest Earned for Time Deposit

Answer 9

Depending on deposit and holding period

Question 10

T or F: Savings, Checking, and Time Deposit have withholding tax

Answer 10

True (Checking, if comes with interest)

Question 11

T or F: Savings, Checking, and Time Deposit can be accessed via OTC

Answer 11

True

Question 12

T or F: Savings, Checking, and Time Deposit come with ATM cards

Answer 12

False (Checking: not all banks; Time Deposit: none at all)

Question 13

T or F: Savings, Checking, and Time Deposit come with passbooks

Answer 13

True

Question 14

T or F: Savings, Checking, and Time Deposit can be accessed online

Answer 14

False (There is no online banking for time deposit) edit: hndi ba to not for all banks lang

Question 15

What is the withholding period of Time Deposits?

Answer 15

Days: 30, 60, 90, 180
Years: 1, 5, 10

Question 15

T or F: There is a pre-termination fee in Checking accounts

Answer 15

False (Time Deposit accounts)

Question 16

All-in-one savings, current, and time deposit. (Commonly offered by international banks. Seldom, by local banks.)

Answer 16

Money Market Accounts

Question 17

ADB for Money Market Accounts

Answer 17

₱100,000

Question 18

T or F: You can access Money Market Accounts through OCT-passbook, ATM, online, but not chequebook

Answer 18

False (you can also access it thru checkbook

Question 19

Type of account where interest is tiered depending on ADB

Answer 19

Money Market Account

Question 20

T or F: Money Market Accounts are not subject to withholding tax

Answer 20

False

Question 21

Type of account where interest is tiered depending on currency

Answer 21

Foreign Currency Accounts

Question 22

Minimum deposit for Foreign Currency Accounts

Answer 22

Differ per country

Question 23

T or F: Foreign Currency Accounts are subject to withholding tax

Answer 23

True

Question 24

T or F: Foreign Currency Accounts can be accessed thru OTC-passbook, chequebook, ATM, online

Answer 24

True

Question 26

Represent shares of ownership (equity) of a (publicly traded) corporation — thus, stockholders become partial owners of the company

Answer 26

Stocks

Question 27

Stocks represent ____________ (equity) of a (publicly traded) corporation — thus, stockholders become ____________ of the company

Answer 27

shares of ownership, partial owners

Question 28

Refers to when a corporation goes public, i.e. starts selling stocks

Answer 28

IPO (Initial Public Offering)

Question 29

Types of shares to invest on

Answer 29

Common Stock Preferred Stock

Question 30

Type of stocks: high risk, high return depending on the stock market fluctuations

Answer 30

Common Stock

Question 31

Type of stock: usually fixed returns, thus, low risk and low return

Answer 31

Preferred Stock

Question 32

Refers to purchase and selling price of stocks

Answer 32

Stock Price

Question 33

Refers to number of shares of stock

Answer 33

Stock Volume

Question 34

Refers to the currency value of shares of stock

Answer 34

Stock Value

Question 35

Refers to earnings of the company shared to stockholders

Answer 35

Dividends

Question 36

Price to Earnings Ratio (PIE Ratio); could mean overvalued, bought a lot, or good earnings

Answer 36

High

Question 37

Price to Earnings Ratio (PIE Ratio); stocks are not popular or earnings could be low

Answer 37

Low

Question 38

Price to Earnings Ratio (PIE Ratio); usu. no earnings and not displayed

Answer 38

Negative

Question 39

Dividend Yield; earnings are high and/or company pays high dividends

Answer 39

High

Question 40

Dividend Yield; earnings are low or company pays low dividends

Answer 40

Low

Question 41

Securities sold (issued) by corporations, financial institutions or the government to interested investors (bondholders)

Answer 41

Bonds

Question 42

Refers to price of bond at initial purchase; amount to be returned upon maturity of the bond.

Answer 42

Face Value (Par Value)

Question 43

Refers to interest paid once or several times for a bond a year until maturity.

Answer 43

Coupon

Question 44

Financial Statement Analysis; Each item in the income statement is found as a % of Total Assets.

Answer 44

Vertical Analysis

Question 45

Financial Statements Analysis; Trending or comparison of current vertical analysis with previous years’.

Answer 45

Comparative Analysis

Question 46

Financial Analysis Statements; Computation of growth rates (or %change) of items in the I/S.

Answer 46

Horizontal Analysis