Assessment

I. True or False
Directions: Read the following sentences. Write the letter “T” if the statement is True
and “F” if the statement is False. Write your answer on the space before the number.
You may view this test at our google class.
Note: Please input all your answer in the google form to record your score.
______1. Higher interest rates make loan as affordable, while high interest on savings
accounts encourage spending rather than saving.

______2. Barter involves the exchange of an item for one or more of a perceived equal
value.
______3. The government is responsible for determining the supply of money.

______4. From the view point of a potential lender, the interest rate is the premium that
must be paid in order to acquire goods sooner and pay for them later.

______5. There is speculative demand because of the result of unanticipated

payments.

______6. Too much money can cause inflation because of higher price levels.

______7. The concept of present discounted value is based on the common-sense

notion that peso cash to flow paid to you one year from now is more valuable to you than
a peso paid to you today.

______8. Interest rates are determined by the demand for and supply of loanable funds.
Investors demand funds in order to finance capital assets that they believe will decrease
output and generate profit.

______9. Interest rates in the loanable funds market will differ mainly because of the
differences in the risk associated with the loans.

______10. People originally traded deficit commodities with each other in a process
known as bartering.

______11. Despite the problems with bitcoin, the underlying technology behind it, known
as blackchain.

______12. The Bangko Sentral ng Pilipinas supervise the payments system but doesn’t
directly control it because many payments are processed by banks and other private
firms.
______13. Money can facilitate exchange at a given point in time by providing a medium
of exchange and unit of account.

______14. Settling transactions with currency does, however, does not requires more
steps than settling transactions with checks

______15. The modern BSP payments system is a fiat money system because the BSP
does exchange paper currency for gold or any other commodity money.

______16. Futures contracts are purchased either as an investment or as a hedge

against the risks of future price changes.

______17. Forward contract does not call for a daily cash settlement for price changes
in the underlying contract

______18. Financial instruments include financial liabilities, equity instrument, financial

assets and derivatives.

_______19. A financial instrument is any contract that gives rise to a financial asset of
one entity and a financial liability or equity instrument of another entity.

______20. Options serve the same purpose as futures in that respect but are
fundamentally different. Importantly, though, the option holder has obligation to exercise
the option.
______21. Forward contracts are purchased either as an investment or as a hedge
against the risks of future price changes.

______22. Foreign currencies is also a financial instrument representing financial

liabilities.

II. Identification
Directions: Identify the following questions and write your answer on the space before
the number. You may view this test at our google class.
______________1. Pertains to the real price one must pay for earlier availability.

______________2. Defined as the cost of using money over time.

______________3. Any item or commodity that is generally accepted as a means of

payment for goods and services or for payment of debts, and that serves as an asset to
its holder.

______________4. Defined as the direct exchange of goods.

______________5. Pertains to weights of precious metals used by some merchants
were later formalized as coins that were usually issued by states.

______________6. A form of electronic money that exist solely as encrypted data on

server.

______________7. Money demanded for day-to-day payments through balances held

by households and firms.

______________8. The central bank that controls the country’s economy here in the
Philippines.

______________9. Reflects the expectation that the loan will be repaid with pesos of
less purchasing power as the result of inflation.

______________10. Responsible for determining the supply of money.

______________11. Are promises to pay on demand money deposited with a bank or

other financial institution. They can be written for any amount, and using them is a
convenient way to settle transactions.

______________12. Has a legal monopoly on the right to issue currency.

______________13. Refers to a good used as money that has value independent of its
use as money.

______________14. Refers to money, such as paper currency that has no value apart
from its use as money.

______________15. It serves as a storage for your bitcoins.

______________16. Are financial instruments similar to bank drafts but are drawn
generally from authorized post offices or other financial institutions.
______________17. Any contract that evidences a residual interest in the assets of an
entity after deducting all of its liabilities.
______________18. It gives holder the right either to buy or sell an instrument at a
specified price and within a given time period.
______________19. An agreement between a seller and a buyer that requires that
seller to deliver particular commodity at a designated future date, at a predetermined
price.
______________20. Are commitments by banking institutions to advance funds on
demand by the party to whom the draft was directed.
______________21. Refers to an agreement between two or more parties that has clear
economic consequences that the parties have little, if any, discretion to avoid, usually
because the agreement is enforceable by law.
______________22. Any contract that gives rise to a financial asset of one entity and a
financial liability or equity instrument of another entity.
______________23. A financial instrument that “derive” their value on contractually
required cash flows from some other security or index.
______________24. Are checks payable to the enterprise or bearer but not yet
presented to the bank for payment.
III. Matching type
Directions: Match the following terms with the correct definitions. Write your answer on
the space before the number. You may view this test at our google class.
A. restructuring B. capital market C. money market

D. real capital E. inflation F. primary market

G. secondary market H. disinflation I. financial capital

______1. This form of capital is found in the statement of financial position under long-
term liabilities and equity.
______2. The purchasing power of the peso shrinks over time.
______3. A market where the securities being traded are new public offerings.
______4. Securities with a maturity of less than I year.
______5. Redeploying the asset and liability structure of the firm.
______6. A leveling off or slowing down of price increases.
______7. Market composed of common stock, preferred stock, commercial and
government bonds and other long-term securities
______8. This market trades previously issued securities.
______9. The high inflation rates of the 1980s caused this form of capital to hold its
value better than other forms of capital during this time period.

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