Pre-Diagnostic Test (Banking and Finance)

The concept of present value relates to the idea that

• The discount rate is always higher when you invest now than in the future.

• The discount rate is always higher when you invest in the future than now.

• The money you have now is worth less today than an identical amount you would receive in the future.

• The money you have now is worth more today than an identical amount you would receive in the future.

• None of the choices

If you could earn an annual interest rate of 3% and start with Php100,000 how much would you have after 3 years?

• 93,000

• 109,000

• 103,000

• 203,000

What is annuity?

• A series of unequal payments at equal time periods, which are guaranteed for a fixed number of years.

• A series of equal payments at equal time periods and guaranteed for a fixed number of years.

• A stream of cash flows that start one year from today and continue while growing by a constant growth rate.

• An investment that has no definite end and a stream of cash payments that continues forever.

What is the enterprise value of a business?

• The entire value of the business considering its capital structure.

• The entire value of the business without giving consideration to its capital structure.

• The book value of equity of the business.

• The market value of equity of the business.

Which of the following is not a financing activity?

• • Payment of dividends

• • Repayment of long-term debt

• • Issuance of equity

• Buying and selling investments

SCENARIO:

A customer approaches your window and starts to complain.

"I have been waiting here for half an hour I'm about to be late for a meeting now because everyone here is taking their time. I need to deposit this check ASAP".

How will you respond?

• I apologize and explain that this is usually a busy time in the branch, and advise him to come in the morning next time so that he won't have to wait so long.

• I will say that I understand it's frustrating to wait, but now I need him to calm down so that I can help him with what he needs.

• I will apologize that he/she has waited so long; it must be very frustrating. I will tell him/her to do my best so we can finish quickly.

• I will explain that we can't control the length of the waiting line. It's important to maintain the bank's reputation.

SCENARIO:

While handling the customer's check, you see that some of the details on the deposit slip are missing and that the check is not signed. As you ask the customer to fill in those details, he responds aggressively: "You already know my details, can't you do it for me?"

• I will explain that I cannot sign the check for him due to regulations.

• I will fill out all the details myself and endorse the check. Customer service is important to me, and he is already upset with the bank.

• I will apologize, but I will ask him again to fill out the details as I can't do it due to bank policy and offer that next time; he fills out the deposit slip in advance to save time.

• I will apologize and say that I will fill in the details that I can, but I need him to sign the check as I cannot do it myself.

Which of the following is created by a financial relationship between suppliers and users of short-term funds?

• capita market

• stock market

• money market

• financial market

Which of the following is not a financial institution?

• insurance company

• commercial bank

• newspaper publisher

• pension fund

Which of the following is the primary goal of financial manager?

• Minimizing risk

• minimizing return

• Maximizing risk profit

• maximizing wealth