Series 66: Chapter 1 Practice Questions

Taken from our Series 66 Online Guide

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. An investor calculating the investing merits of a payment or payments not yet received might potentially use all of the following except:
  17. A. Present value
  18. B. Net present value
  19. C. Future value
  20. D. Internal rate of return
  21. 5. 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?
  22. A. $1,000 / (1 + 0.08)3
  23. B. $1,000 x (1 + 0.08)3
  24. C. 3 x $1,000 x (1 + 0.08)
  25. D. 3 x $1,000 / (1 + 0.08)
  26. 6. Which balance sheet item is deducted from current assets in arriving at the acid test or quick ratio?
  27. A. Accounts receivable
  28. B. Inventory
  29. C. Taxes
  30. D. Equipment
  31. 7. My ABC Company sells personalized ABC books and has a current ratio of 4:1. If the company has $40,000 in current assets, how much working capital does it have?
  32. A. $40,000
  33. B. $30,000
  34. C. $10,000
  35. D. $160,000
  36. 8. You have received the following facts about various companies. One of the pieces of information has an error. Which company is most likely to have the error?
  37. A. Company A has a quick ratio of 0.2
  38. B. Company B has a working capital of -$30 million
  39. C. Company C has a P/E of 15
  40. D. Company D has a current ratio of -2
  41. 9. Ste

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