Savvy Lender Quiz
This quiz is meant to both educate and evaluate the financial knowledge of our future lenders for Acquisition purchases, rehabilitations, and sale of current and future properties.
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1. What is a Stock?
A digital currency
A security that represents the ownership of a fraction of the issuing corporation
A guaranteed check by a company
A debt to the government
2. What is a bond?
Equity in a company
Equity in a government
A local currency
Bonds represent the debts of issuers, such as companies or governments
3. What is a mutual fund?
Financial vehicle that pools assets from shareholders to invest in securities likestocks, bonds, money market instruments, and other assets.
A security guaranteed by the SEC
A security guaranteed to profit
A contract to hedge against stock investments
4. What is a dividend?
Interest paid on a stock every year
A fee paid by companies to shareholders
Distribution of a company earnings to its shareholders and is determined by thecompany's board of directors
A form of bond
5. True or False: Dividends guaranteed to be paid?
True
False
6. What is an Annual Percentage Yield (APY)?
The real rate of return earned on an investment
Fee paid to have a loan
Annual service fee by banks
Total worth of a security at the end of the year
7. What is an Annual Percentage Rate (APR)?
Refers to the yearly interest generated by a sum that is charged to borrowers or paid to investors
A penalty for a late payment
Earnings on Equity
Exchange rate of a currency for the U.S Dollar
8. How do you calculate profit?
Revenue + Cost = Profit
Revenue - Cost = Profit
Equity - Cost = Profit
Revenue + Equity - Equity- Interest= Profit
9. True or False: The FDIC guarantees deposits in banks up to 250k?
True
False
10. True or False: The SEC guarantees profits in the stock market?
True
False
11. 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
12. What is an annuity?
An investments that has no definite end and a stream of cash payments that continues forever
A stream of cash flows that start one year from today and continue while growing by a constant growth rate
A series of equal payments at equal time periods and guaranteed for a fixed number of years
A series of unequal payments, at equal time periods, which are guaranteed for a fixed number of years
13. What is a par value of a bond?
The amount borrowed by the issuer of the bond and returned to the investors when the bond matures
The overall return earned by the bond investor when the bond matures
The difference between the amount borrowed by the issuer of bond and the amount returned to investors at maturity
The size of the coupon investors receive on an annual basis
14. When the price of a bond is above the face value, the bond is said to be:
Trading at Par
Trading at a premium
Trading at a discount
Trading below par
15. Which of the following is true when a bond is trading at a discount?
Coupon Rate > Current Yield > Yield to Maturity
Coupon Rate < Current Yield < Yield to Maturity
Coupon Rate = Current Yield = Yield to Maturity
Coupon Rate < Current Yield = Yield to Maturity
16. The concept of time value of money is that:
The cash flows that occur earlier are more valuable than cash flows that occur later
The cash flows that occur earlier are less valuable than cash flows that occurs later
The longer the time cash flows are invested, the more valuable they are in the future
The future value of cash flows are always higher than the present value of the cashflows
17. If you were able to earn interest at 13%, starting with $100, how much would you have after 3 years?
91.51
109.27
291.26
103.00
18. Which of the following is not an investment grade credit rating?
BB+
BBB+
BBB
BBB-
19. What is working capital?
Equity Capital + Retained Earnings
Equity Capital - Total Liabilities
Total Assets -Total Liabilities
Current Assets - Current Liabilities
20. True of False: Paying the principal down on an installment loan will reduce the monthly payments.
True
False
21. What does "Risk" mean?
Having negative vibes or feelings about an investment
Something that only happens to questionable stocks
Potential for upside and gain downside and loss in an investment
A video game
22. True or False: An ETF only tracks the U.S Dollar?
True
False
23. True or False: All stocks are tracked by the NASDAQ?
True
False
24. True of False: You pay a tax when you have had a stock for a year?
True
False
25. What is the Securities and Exchange Commission (SEC)?
Organization that guarantees investments
Organization meant to protect investors and maintain fair, orderly, and efficient markets
Organization that guarantees deposits in banks
A restaurant in New York City
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