Series 66: Chapter 1 Practice Questions

Chapter 1 Practice Questions

1. 1. Which of the following would not be a current asset?
2. A. Inventory
3. B. Accounts receivable
4. C. Cash
5. D. Trademarks
6. 2. The best place to look for a current list of the long-term debts a company must repay is its:
7. A. Prospectus
8. B. Form 144
9. C. Balance sheet
10. D. Income statement
11. 3. All of the following are components of a company’s quick ratio except:
12. A. Inventory
13. B. Accounts receivable
14. C. Cash
15. D. Current liabilities
16. 4. All of the following will likely be contained in a company’s annual report:
17. I. Financial highlights from previous fiscal year
18. II. Changes to business in previous fiscal year
19. III. Company prospectus
20. IV. Letter from regulators stating company’s soundness
21. A. I and IV
22. B. I and II
23. C. II and III
24. D. III and IV
25. 5. An audited annual summary of a company’s finances can be found on:
26. A. Form 10-K
27. B. Form 10-Q
28. C. Schedule 13D
29. D. Form 8-K
30. 6. An investor calculating the investing merits of a payment or payments not yet received might potentially use all of the following except:
31. A. Present value
32. B. Net present value
33. C. Future value
34. D. Internal rate of return
35. 7. Jim wishes to calculate the future value of $1,000 three years from now if it earns 8%. Which of the following could be used to calculate this amount?
36. A. $1,000 / (1 + 0.08)3
37. B. $1,000 x (1 + 0.08)3
38. C. 3 x $1,000 x (1 + 0.08)
39. D. 3 x $1,000 / (1 + 0.08)
40. 8. The risk of an investment underperforming or losing value due to an increase in the cost of borrowing money is known as:
41. A. Inflation risk
42. B. Interest rate risk
43. C. Regulatory risk
44. D. Political risk
45. 9. All of the following would be increased risks associated with investing