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5Points Quiz

Identify parties in a bill of exchange transaction

        A.   Drawer, Drawee, Acceptor, Payee, Payer, Endorser, Endorsee

        B.   Drawer, Drawee, Acceptor, Payee, Andorser, Endorsee

        C.   Drawer, Drawee, Acceptor, Payee, Endorser, Endorsee.

        D.  Drawer, Drawee, Acceptee, Payee, Endorser, Endorsee

Answer: C

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What do you understand by Negotiable Instrument?

        A.  They are instruments subject to negotiation

        B.   They are near cash instruments that are acceptable means of payments in transactions, as well as for debt settlement.

        C.   They are alternative money used in payments in all transactions.

        D.  They include those instruments used in entertainment in the financial sector.

Answer: B

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What then is the paradox of thrift?

        A.  That if people decide to save less, they may end up saving more, unless if the decrease in propensity to save is accompanied by a lower propensity to invest.

        B.   That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a lower propensity to invest.

        C.  That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a higher propensity to invest.

        D.  That if people decide to save more, they may end up saving less, unless if the increase in propensity to save is accompanied by a higher propensity to invest.

Answer: C

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Why is thriftiness often seen as a virtue?

        A.  This is because an increase in thrift on the part of an individual leads to greater savings and wealth.

        B.   This is because an increase in thrift will increase an individual's networth.

        C.   This is because an increase in thrift will increase the amount of money in the individual's bank account

        D.   This is because an inrease in thrift on the part of the individual leads to greater return on investment.

Answer: A

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Pre-Keynesian economists argue that saving and investment are not equal for certain reasons except

        A.   savings and investment depend upon different factors and are made for different purposes and motives

        B.  hey also pointed out that the excess of investment over saving has led banks to create new credit

        C.  hey also pointed out that the excess of investment over saving has led banks to create new credit

        D.  savings naturally preceed investment

Answer: D

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Mathematically, Net Present Value of an investment is the

        A.  difference between total present value of cash outflows and total present value of cash inflows occurring in periods over the entire life of the project

        B.  difference between income and expenditure on an investment

        C.  total value of all projects the company is involved in

        D.  the different between total cash outflows and total cash inflows occurring in periods over the entire life of the project

Answer: B

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What is the Present Value Criterion of Investment used for?

        A.   It is used to evaluate the value of an investment project

        B.  It is used to measure the cost of an investment project

        C.  It is used to raise funds for an investment project

        D.  It is used to evaluate the profitability of an investment project

Answer: D

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What is Marginal Efficiency of Investment?

        A.   It is the rate of return expected from a given investment on a fixed asset after covering all its costs

        B.  It is the rate of return expected from a given investment on a capital asset including all its costs, except the rate of interest

        C.  It is the rate of return expected from a given investment on a capital asset after covering all its costs, except the rate of interest

        D.  It is the rate of return expected from a given investment on a money asset after covering all its costs, except the rate of interest

Answer: C

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What do you understand by Marginal Efficiency of Capital?

        A.  This refers to the highest rate of return expected from an additional unit of a capital asset over its cost

        B.  This refers to the lowest rate of return expected from an additional unit of a capital asset over its cost

        C.  This refers to the average rate of return expected from an additional unit of a capital asset over its cost

        D.  This refers to the minimum rate of return expected from an additional unit of a capital asset over its cost

Answer: A

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