MCQ Flashcards
7 cards from real AAFM practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 MCQ flashcards as text
Working capital is calculated as:
Answer: Current assets minus current liabilities
Working capital equals current assets minus current liabilities, indicating short-term financial health.
Which strategy involves investing a fixed dollar amount at regular intervals regardless of price?
Answer: Dollar-cost averaging
Dollar-cost averaging invests fixed amounts regularly, reducing the impact of price volatility.
A company's gross profit margin is best described as:
Answer: Revenue minus cost of goods sold, divided by revenue
Gross profit margin shows the percentage of revenue remaining after deducting the cost of goods sold.
In risk management, 'hedging' is primarily used to:
Answer: Offset or reduce potential losses
Hedging uses offsetting positions to reduce exposure to adverse price movements.
Which of the following best defines 'inflation'?
Answer: A general rise in prices over time
Inflation is the sustained increase in the general price level, eroding purchasing power.
A defined-benefit pension plan promises the retiree:
Answer: A specified retirement benefit based on salary and service
A defined-benefit plan guarantees a specific benefit typically based on salary history and years of service.
The primary role of a central bank in monetary policy is to:
Answer: Manage money supply and interest rates
Central banks control monetary policy by managing the money supply and setting benchmark interest rates.