ACCA FM Quiz Revision 1

Question 1

A government follows an expansionary monetary policy. How would this typically affect businesses?

Accepted Answer

Higher demand, lower interest rates on loans and increased credit available

Question 2

A government body uses measures based upon the 'three Es' to measure VFM. Which of the following relates to efficiency?

Accepted Answer

Cost per successfully treated patient

Question 3

Which is NOT a Financial Intermediary?

Accepted Answer

Company Stocks

Question 4

which of the following measures would NOT be consistent with an EXPANSIONARY POLICY objective?

Accepted Answer

Increasing the exchange rate

Question 5

Which of the following does NOT form part of the objectives of a corporate governance best practice framework?

Accepted Answer

Minimisation of risk

Question 6

The term monetary policy can BEST be described as

Accepted Answer

Regulating the extent to which commercial banks can create credit

Question 7

Rank the securities in order of increasing risk

Accepted Answer

Unseured loan; Pref share; Ord share

Question 8

Which of the following is an aspect of fiscal policy measures by the government?

Accepted Answer

To alter rates of taxation

Question 9

Fiscal policy & Demand management: If a government spends more by borrowing more, demand increases

Accepted Answer

True

Question 10

A government has adopted a contractionary fiscal policy. How would this typically affect businesses?

Accepted Answer

Higher taxes and lower government subsidies

Question 11

What is a financial intermediary?

Accepted Answer

it brings together people who want to borrow and save money

Question 12

Which of the following would be likely to occur if there was an increase in the money supply in the economy?

Accepted Answer

A rise in the rate of inflation

Question 13

Which of the following is NOT a broad macro economic goal?

Accepted Answer

massive profits

Question 14

A school increases class sizes, and examination results suffer as a result. Re VFM, which one of the following is TRUE

Accepted Answer

Efficiency has increased but effectiveness has decreased

Question 15

What is fiscal policy?

Accepted Answer

Gov. policy that attempts to manage the economy

Question 16

Stakeholders can be classified as internal, connected or external. Which of the following is an external stakeholder?

Accepted Answer

Government

Question 17

Which of the following is most likely to increase aggregate demand in the economy?

Accepted Answer

Increased investment

Question 18

Fiscal policy & Demand management: If demand in the economy is high then government borrowing will fall

Accepted Answer

True

Question 19

Why is Keynesian Policy not sustainable?

Accepted Answer

It creates deficits and debt

Question 20

The central issue of corporate governance is...

Accepted Answer

how to protect outside investors from the controlling insiders, how to solve conflicts of interest between shareholders and bondholders, how to alleviate conflicts of interest between managers and shareholders, how to protect creditors from managers and controlling shareholders

Question 21

Financial management objective

Accepted Answer

Profitablity

Question 22

Which one of the following statements is incorrect?

Accepted Answer

Money markets are markets for long-term capital

Question 23

Interest rates in Isopia have recently been reduced. Which of the following is most likely to result from this cut?

Accepted Answer

An increase in spending

Question 24

Advantages of better corporate governance are

Accepted Answer

lower costs of capital

Question 25

Which of these are not a function of management?

Accepted Answer

influencing stakeholders

Question 26

Least likely to act as a Financial intermediary

Accepted Answer

Credit rating agency

Question 27

Which of the following is NOT a function that financial intermediaries fulfill for customers and borrowers?

Accepted Answer

Dividend creation

Question 28

Which of the following is most consistent with maximising shareholder wealth?

Accepted Answer

Minimising the firm's cost of capital

Question 29

Which of the following organisations is most likely to benefit from a period of high price inflation?

Accepted Answer

An organisation which has a large number of long term payables

Question 30

What is a stakeholder?

Accepted Answer

Stakeholders are not always shareholders., Stakeholder has an interest in the performance of a company., Stakeholders can be internal or external.

Question 31

Which of the following are NOT money market instruments?

Accepted Answer

Corporate bond

Question 32

Which of the following is most appropriate as an objective of a not-for-profit organisation?

Accepted Answer

To make efficient use of resources

ACCA FM Quiz Revision 1

Questions 32

ACCA FM Quiz Revision 1

Questions 32