Hannah Wason’s Commercial Awareness Practice Test

Hannah Wason’s Commercial Awareness Practice Test Q1-50

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GO BUNNY!!!

1. Which regulatory body oversees the financial conduct of firms in the UK?

A) Financial Conduct Authority B) Securities and Exchange Commission C) Financial Supervisory Authority D) Prudential Regulation Authority

2. What impact did Brexit have on the financial passporting rights of UK firms in the EU?

A) No impact B) Enhanced rights C) Limited access to EU markets D) Increased access to EU markets

3. Which of the following sectors is most affected by the UK's recent increase in corporation tax?

A) Hospitality B) Manufacturing C) Financial Services D) Retail

4. What is a key reason UK companies are adopting Environmental, Social, and Governance (ESG) criteria?

A) To improve shareholder returns B) To comply with EU regulations C) To address investor expectations D) To enhance short-term profits

5. Which organization represents the UK's legal profession?

A) Law Society of England and Wales B) American Bar Association C) Solicitors Regulation Authority D) Law Commission

6. In 2021, which city was the leading global financial centre?

A) New York B) London C) Tokyo D) Hong Kong

7. What is the primary purpose of the Bank of England’s Monetary Policy Committee?

A) To regulate the stock market B) To set interest rates C) To monitor tax collection D) To oversee banking regulations

8. Which sector is most closely associated with the term "Big Four"?

A) Retail B) Banking C) Accounting D) Technology

9. Which organization is responsible for maintaining financial stability in the UK?

A) Financial Conduct Authority B) Bank of England C) Prudential Regulation Authority D) British Chambers of Commerce

10. What does GDP stand for?

A) Gross Domestic Product B) Gross Development Product C) General Domestic Product D) Gross Domestic Percentage

11. The term “bull market” refers to what kind of market condition?

A) Falling stock prices B) Rising stock prices C) Stable stock prices D) Volatile stock prices

12. What is the primary purpose of a central bank?

A) To manage the government’s budget B) To regulate commercial banks C) To print money D) To set interest rates and control inflation

13. Which type of investment is generally considered the least risky?

A) Stocks B) Bonds C) Real estate D) Commodities

14. Which economic indicator measures the overall economic health of a country?

A) CPI B) GDP C) Unemployment Rate D) Interest Rate

15. Which of these is considered a “safe haven” asset during economic downturns?

A) Stocks B) Bonds C) Gold D) Real estate

16. What does the term “liquidity” refer to in finance?

A) The profitability of an asset B) The ease of converting an asset to cash C) The value of an asset over time D) The tax rate applied to an asset

17. Which type of market has a prolonged period of falling prices?

A) Bull Market B) Bear Market C) Growth Market D) Stagnant Market

18. In economic terms, what does “inflation” mean?

A) A decrease in currency value B) An increase in currency value C) An increase in the general price level D) A decrease in the general price level

19. What is the role of the World Trade Organization (WTO)?

A) To regulate global oil production B) To facilitate international trade C) To control currency exchange rates D) To promote sustainable development

20. Which currency is often referred to as the “reserve currency”?

A) Euro B) Pound Sterling C) US Dollar D) Japanese Yen

21. What is the primary purpose of diversification in investing?

A) To increase profits quickly B) To reduce risk C) To simplify portfolio management D) To maximize short-term gains

22. Which institution primarily controls interest rates in the United States?

A) Bank of America B) Federal Reserve C) Congress D) U.S. Treasury

23. Which of the following is typically a characteristic of a recession?

A) High inflation B) Increased consumer spending C) Rising employment levels D) Negative economic growth

24. What is the main purpose of an IPO (Initial Public Offering)?

A) To introduce a new product B) To allow a company to go public C) To acquire another company D) To close down the business

25. Which term refers to the total amount of money that a company earns from its sales before expenses?

A) Net profit B) Gross revenue C) Net revenue D) Operating income

26. Which of these organizations is known for setting global trade rules?

A) IMF B) World Bank C) WTO D) EU

27. What is a “hedge fund”?

A) A type of insurance policy B) An investment fund with higher risks and returns C) A government savings program D) A form of real estate investment

28. In finance, what does “ROI” stand for?

A) Return on Investment B) Revenue of Income C) Ratio of Interest D) Return of Income

29. What is the primary role of the IMF?

A) To reduce tariffs B) To provide financial assistance to countries C) To regulate global banking D) To oversee multinational corporations

30. In economics, what does “supply and demand” refer to?

A) The amount of goods available and people’s desire for them B) The income generated by companies C) The costs of production and profit margins D) The taxes and subsidies provided by the government

31. Which of the following is an example of a “fixed asset”?

A) Cash B) Accounts Receivable C) Inventory D) Machinery

32. What is the primary function of insurance?

A) To guarantee profits B) To manage risk C) To increase cash flow D) To invest in the stock market

33. What is a “dividend” in financial terms?

A) A portion of a company’s profits distributed to shareholders B) A fee paid by stockholders to the company C) A type of bond payment D) A form of tax on investments

34. Which of the following is a primary market function?

A) Trading shares on the stock exchange B) Issuing new securities C) Selling government bonds D) Facilitating mergers

35. Which term describes the initial price of an asset?

A) Book Value B) Market Value C) Par Value D) Face Value

36. What is the main role of a financial advisor?

A) To help clients make investment decisions B) To perform tax audits C) To manage the stock exchange D) To issue bonds for clients

37. Which type of bond is issued by the government?

A) Corporate Bond B) Municipal Bond C) Treasury Bond D) Convertible Bond

38. Which of the following is considered an intangible asset?

A) Inventory B) Patents C) Land D) Buildings

39. What does “P/E ratio” stand for?

A) Profit/Earnings Ratio B) Price/Earnings Ratio C) Product/Expense Ratio D) Principal/Earnings Ratio

40. What is the main purpose of a credit rating agency?

A) To regulate financial institutions B) To evaluate the creditworthiness of borrowers C) To assess market conditions D) To provide investment advice

41. What does “fiscal policy” primarily involve?

A) Controlling money supply B) Government spending and taxation C) Setting interest rates D) Adjusting exchange rates

42. What is a primary goal of monetary policy?

A) Reduce government debt B) Stabilize the currency C) Lower taxes D) Promote exports

43. Which type of bond is considered the safest investment?

A) Corporate bond B) Treasury bond C) Municipal bond D) Junk bond

44. What does “equity” refer to in finance?

A) Debt owed by a company B) Cash reserves C) Ownership in an asset D) Revenue generated by sales

45. What is an “exchange rate”?

A) The interest rate on loans B) The price of one currency in terms of another C) The rate of stock exchange transactions D) The bond yield rate

46. Which of the following is a characteristic of a “recession”?

A) Economic growth B) High inflation C) Rising employment D) Declining GDP

47. What does “IPO” stand for?

A) Initial Profit Offering B) Initial Public Offering C) International Public Offering D) Investment Profit Offering

48. Which is a major goal of fiscal policy?

A) Reducing unemployment B) Controlling inflation C) Promoting exports D) All of the above

49. What is a “bond yield”?

A) The annual return on a bond B) The principal value of a bond C) The market value of a bond D) The tax rate on a bond

50. What is the main purpose of a central bank?

A) To regulate the currency exchange market B) To control a nation's money supply C) To manage inflation rates D) All of the above