FBLA Introduction to Finance Math Test

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

• $110.25

• $105.00

• $110.00

• $102.50

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

• 7.5%

• 15%

• 30%

• 10%

• $47.62

• $50.00

• $104.76

• $95.24

Which of the following is NOT a component of a basic budget?

• Income

• Expenses

• Debt-to-Income Ratio

• Savings

What is the primary goal of risk management in finance?

• Maximizing return

• Minimizing risk

• Eliminating risk

• Balancing risk and return

Which of the following is considered a long-term financial goal?

• 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

What is the formula for calculating the Current Ratio?

• Current Assets / Current Liabilities

• Total Assets / Total Liabilities

• Current Liabilities / Current Assets

• Net Income / Total Assets

• 20%

• 25%

• 15%

• 10%

What does a budget forecast typically include?

• Past financial performance

• Future financial projections

• Current financial statements

• Historical market trends

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