FBLA Introduction to Finance Math Test

Front

What is the future value of $100 invested for 2 years at an annual interest rate of 5%, compounded annually?

Back

$110.25

Front

If a company's Return on Equity (ROE) is 15% and its Equity Multiplier is 2, what is its Return on Assets (ROA)?

Back

7.5%

Front

Back

$47.62

Front

Which of the following is NOT a component of a basic budget? Income, Expenses, Debt-to-Income Ratio, Savings

Back

Debt-to-Income Ratio

Front

What is the primary goal of risk management in finance? Options: Maximizing return, Minimizing risk, Eliminating risk, Balancing risk and return

Back

Balancing risk and return

Front

Which of the following is considered a long-term financial goal?
Options: Saving for a vacation next year, Paying off credit card debt in six months, Buying a home in five years, Purchasing a new car with cash in two years

Back

Buying a home in five years

Front

What is the formula for calculating the Current Ratio?

Back

Current Assets / Current Liabilities

Front

Back

20%

Front

What does a budget forecast typically include?

Back

Future financial projections

Front

Which of the following best describes diversification in investment? Investing all your money in a single stock, Spreading your investments across various financial instruments, Focusing on bonds only, Buying stocks from a single industry

Back

Spreading your investments across various financial instruments