COLLEGE OF BUSINESS ADMINISTRATION AND ACCOUNTANCY

Quezon City

BANKING AND FINANCIAL INSTITUTION

Prelim Examination – March 2020

General Instructions:
1. Use the Examination Booklet as your answer sheet.
2. Read the instructions carefully and address all questions or any clarifications to assigned proctor.
3. Keep your cell phone and other electronic devices during examination.

4. Anybody caught in any act of cheating will automatically be graded zero in this exam.

TEST I. Identification and Filling the blanks (25 points). Choose the best answer from the box

1. ___________ represents an asset to one entity and a liability or Book Balance

equity to the other. Book Value
2. _______________ are government agency or privately owned entity Bridge Loan
that Collects Funds from the public, and from other institutions. Business Net Income
3. The components of the financial system are Non-banking financial Financial Instrument
Guardian
Institutions and _____.
Appraisal
4. Expanded commercial banks or _____ offers the wide variety
Available Balance
of Banking services among financial institutions Balloon Loan
5. The Landbank of the Philippines was set up in the early ______ as a Financial institutions
Financial arm of the land reform program. Banks
6. ________ was created by the government universal banks
with the Specific function of providing long term credit to finance private 1970’s
development projects. Accrued Interest
7. _______ are organized primarily to accumulate the Amortization
Savings of depositors and to invest them together. Joint Owner
8. The _____ is the official insurance corporation of the banking system. Co-Signer
DBP
9. _________ are stock corporations engaged in the underwriting of
SMB
Securities of other corporations on a guaranteed basis.
PDIC
10. _________ is the process by which the monetary  Investment house
authority of a country controls the supply of money Monetary policy
11. ______ is the amount of money distributed by the corporation to the Dividend
stockholders based on the number of stocks that they are holding. Bonds
12. ______ is a type of investment in the form of a long-term promissory Investor
notes by the investee
13. ______ is the person who invests his money in stocks, bonds, or Foreign
exchange
14. _______ is the Interest that has been earned but not yet paid.
15. _______ is the process of reducing debt through regular installment payments of principal and
interest that will result in the payoff of a loan at its maturity.
16. _______ means two or more people share equal ownership of an account.
17. ______ has responsibility for repayment of a loan if primary borrower does not pay.
 18. _______ has the legal authority to manage a person’s account.

19. ______ is the act of determining the value of a property by an outside source. Common in real
estate transactions.
20. ______ is the money you have available in your account.
21. ______ usually offers lower payments through the life of the loan, with a large amount of
money being due at the end of the loan term.
22. ______ is the amount of money available before any adjustments are made for deposits in
transit, checks that have not cleared and interest on float funds.

23. ______ is a company’s total assets minus liabilities and intangible assets. In other words, what
a company would have remaining in assets if it went out of business today.

24. ______ it is also known as a “Swing Loan.” It helps you bridge the gap when you have more
than one obligation.
25. ______ is what remains after all costs are subtracted from Gross Income. Often called
“earnings” or “profit.”

TEST II. Write TRUE if the statement is correct, write FALSE if it is otherwise (15 points)

1. Example of primary equity instruments are bonds, loans, and deposits of stocks
2. An example of combinations financial instruments are dual currency banks and
convertible cash.
3. The financial system is the custodian of the country’s liquid reserves and based essentially on
trust and confidence of the government.
4. Financial institutions serve as intermediaries in the saving-investment process
5. Non-bank financial institution operates within the regulatory framework whose
parameters are set by the BSP.
6. Financial institutions act as intermediaries between saver and borrowers and are
7. Differentiated by the way they obtain and invest their stocks.
8. A financial system can operate on a global, regional, or national level.
9. Commercial banks can engage in overwriting activities
10. Commercial banks constitute the bulk of the banking system
11. Specialized government banks specifically provides an opportunity for veterans of the armed
forces to work in the field of banking and finance
12. Banks also offer leasing services and insurance services
13. BPS provides policy directions in the areas of money, banking, and credit.
14. The BSP promotes liberal foreign exchange rates
15. Monetary policy often targets a rate of interest for the purpose of promoting economic growth
and liquidity

TEST III. Enumeration (11 points):

1.5 Top banks in the Philippines

6-11 Objectives of monetary policy
TEST IV. Give the meaning of the following Acronyms (12 points):

1. NBFI
2. LBP
3. DBP
4. SMB
5. BSP
6. PDIC
7. GSIS
8. SSS
9. PSE
10. BOP
11. CD
12. PDC

TEST V. Write a 100-word essay about the image below (15 points)

Prepared by: Checked by: Verified and Noted by:

Dr. Richard Oliver F. Cortez Program Head Prof. Mary Jean M. Jayobo
Faculty College Dean, CBAA
 Answer Key
BANKING AND FINANCIAL INSTITUTION
Prelim Examination – March 2020

TEST I. Identification and Filling the blanks (25 points). Choose the best answer from the box

1. Financial Instrument
2. Financial institutions
3. Banks
4. universal banks
5. 1970’s
6. Development bank of the Philippines
7. Savings and Mortgage banks
8. PDIC
9. Investment house
10. Monetary policy
11. Dividend
12. Bonds
13. Investor
14. Accrued Interest
15. Amortization
16. Joint Owner
17. Co-Signer
18. Guardian
19. Appraisal
20. Available Balance
21. Balloon Loan
22. Book Balance

23. Book Value

24. Bridge Loan

25. Business Net Income

TEST II. Write TRUE if the statement is correct, write FALSE if it is otherwise (15 points)

1-3 false
4-6 True
7-9 False
10-12 True
13-15 False