Registered Financial Planner Pre-Test

Rachel Zane invested Php 10,000.00 at 5% annual interest. After 2 years, her investment was worth Php 11,000.00. Michael Ross also invested Php 10,000.00 but at a higher interest rate of 10% annually. After 2 years, his investment was worth Php 12,100. From the answer choices below, select the letter that correctly identifies whether the investments earned simple interest or compound interest.

A document or certificate that represents an ownership interest in a business or an obligation of indebtedness owed by a business, government, or agency.

When advising a potential policyholder / customer to understand the time value of money, it is correct to say that

Every financial decision is subject to the risk-return trade-off. The risk-return trade-off states that, in general, the lower the risk associated with an investment, the __________ the expected return on the investment.

The ultimate goal of investing is to seek returns while limiting risks to an acceptable level. Generally, the greater the risk associated with an investment, the greater the expected return. The statements below are about the different indicators of higher investment risk except

As with personal and business planning, it is very important to be familiar with the different cash flow or the total amount of money being transferred into and out of that is affecting liquidity. From the example given below, select the cash flow that is money going out of an insurer’s cash budget.

In economics, (inflation / deflation) is a rise in the general level of prices in an economy over a period of time while (inflation / deflation) is a fall in the general level of prices where the purchasing power of money rises.

__________ is the ease with which an asset can be converted to cash for an approximation of its underlying value.

The following are different risks associated with investment. Select the answer choice containing the correct statement.