POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

College of Accountancy and Finance

CAF Review: M&M
FIMA 101: Banking and Financial Institutions

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

1. All are principles of insurance except;

a. Protection
b. Insurable Interest
c. Proximate Cause
d. Subrogation

2. This means that the insurer need not necessarily be the owner of the insured property, but
he must have some vested interest in it.
a. Proximate Cause
b. Insurable Interest
c. Protection
d. Utmost Good Faith

3. All are types of Mutal Funds except;

a. Bond funds
b. Balanced funds
c. Equity funds
d. Equity Income Fund

4. An investment principle that requires holding several securities to reduce the risks
associated with investing.
a. Low Capital Requirement
b. Convenience
c. Diversification
d. Potential Higher Returns

5. A loan with collateral. Finance companies prefer to offer it to people because they present
much lower risks than personal loans.
a. Asset-Based Loans
b. Secured Loans
c. Business Loans
d. Unsecured Loans

6. How do commercial finance companies provide lending services to rapidly growing

businesses based on pledged assets?
a. Asset-Based Loans
b. Secured Loans
c. Business Loans
d. Unsecured Loans

7. This refers to three or more primary cooperatives, doing the same line of business,
registered with the authority to undertake activities in support of its member cooperatives.
a. Social Audit

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions
b. Performance Audit
c. Subsidiary Cooperative
d. Service Cooperatives

8. A procedure wherein the cooperative assesses its social impact and ethical performance
vis-à-vis its stated mission, vision, goals, and code of social responsibility.
a. Performance Audit
b. Social Audit
c. Service Cooperatives
d. Subsidiary Cooperative

9. Statement I. Employer and employee are under compulsory coverage in the regular SSS
Program.
Statement II. Non-Working Spouse (NWS) and separated members are part of voluntary
coverage in the regular SSS Program.
Statement III. House helpers or Kasambahay and Overseas Filipino Workers (OFW) are
not part of voluntary coverage in the regular SSS Program.
a. Statement I and II are only true
b. Statement III is only false
c. All of the statements are false
d. All of the statements are true

10. In GSIS benefits, this accrues or arises upon the irrevocable loss or impairment of certain
portion/s of the physical faculties, despite which the member is able to pursue a gainful
occupation.
a. Total Disability
b. Temporary Total Disability
c. Permanent Partial Disability
d. Permanent Total Disability

11. Which of the following insurance services helps individuals manage financial risks
associated with unexpected medical expenses?
a. Auto insurance
b. Disability insurance
c. Travel insurance
d. Health insurance

12. Which of the following services is commonly offered by investment houses or securities
dealers/brokers?
a. Mortgage lending
b. Real estate development
c. Retirement planning
d. Legal representation

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

13. How do financing companies typically assess the eligibility of borrowers for mortgage
loans?
a. By evaluating the borrower's credit history, income, and debt-to-income ratio.
b. By conducting a thorough property appraisal to determine its value.
c. By considering the borrower's employment stability and financial stability.
d. By reviewing the borrower's previous mortgage payment history.

14. Which of the following functions is typically performed by investment houses or securities
dealers/brokers?
a. Retail sales of consumer electronics
b. Property management for rental properties
c. Execution of securities trades on behalf of clients
d. Personal fitness training services

15. Which of the following insurance products provides coverage for damage or loss to
property, such as homes, buildings, or vehicles?
a. Life insurance
b. Health insurance
c. Property insurance
d. Liability insurance

16. Why is credit card processing for merchants typically provided by financing companies?
a. To provide businesses with convenient payment options for their customers.
b. To assist merchants in planning and booking travel arrangements.
c. To offer legal representation to clients in court proceedings.
d. To support home remodeling and construction projects for individuals.

17. What is the primary purpose of an agrarian reform cooperative?

a. Providing financial services to its members
b. Promoting and advocating cooperation through socially oriented projects
c. Developing an appropriate system of land tenure and management in agrarian
reform areas
d. Offering housing facilities and services to its members

18. Which of the following best describes the purpose of an advocacy cooperative?
a. Providing financial services to its members
b. Promoting and advocating cooperativism through socially oriented projects
c. Engaging in agricultural activities and marketing of agricultural products
d. Offering housing facilities and services to its members

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

19. What is the primary role of the Securities and Exchange Commission (SEC)?
a. Supervision over the regulation of the education sector and educational institutions
b. Regulation of the agricultural sector and farming activities
c. Supervision over the corporate sector and capital market participants
d. Regulation of the healthcare industry and medical services

20. What is the main objective of the Cooperative Development Authority (CDA)?
a. Regulation of the banking and financial institutions in the Philippines
b. Promotion of sustainable agricultural practices in rural areas
c. Facilitation of social justice and equitable national progress through cooperatives
d. Supervision and oversight of the healthcare industry in the Philippines

21. Why should there be regulators for banks and non-bank financial institutions?
a. To promote competition and innovation in the financial sector
b. To ensure the stability and integrity of the financial system
c. To control interest rates and lending practices
d. To facilitate tax collection and revenue generation

22. Statement I. A dealer is an individual or financial firm that purchases and sells securities
for its own business or account.
Statement II. A broker does not trade for its portfolio but instead facilitates transactions
by bringing buyers and sellers together.
Statement III. The dealer accepts stock orders from the client and then executes these
directly on the exchange.
a. Statement I and II are false
b. Statement III is only false
c. Statement I and III and true
d. Statement II and III are true

23. Any person who acts as an intermediary in making deliveries upon payment to effect
settlement in securities transactions.
a. Salesman
b. Associated person of a broker or dealer
c. Insider
d. Clearing agency

24. A pawnshop may extend a loan even if it is not secured by personal property that could be
physically delivered to the control and possession of the pawnshop.
a. True
b. False

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

25. A pawner has seventy-five days from the maturity date to redeem the pawn by
paying the principal and interest.
a. True
b. False

26. Complete incapacity to continue with his present employment or engage in any gainful
occupation due to the loss or impairment of the normal functions of the physical and/or
mental faculties of the member.
a. Disability
b. Permanent Total Disability
c. Gainful Occupation
d. Total Disability

27. It is a policy that guarantees the beneficiary to receive a sum of money when the insured
person dies.
a. Life Insurance
b. Non-Life Insurance
c. Health Insurance
d. Proximate Insurance

28. This type of insurance usually covers your valuables and properties. Which is also known
as general insurance.
a. Life Insurance
b. Non-Life Insurance
c. Homeowner’s Insurance
d. Property Insurance

29. This type of investment continuously sells shares and stands ready to buy them back.
a. Open-end Investment
b. Close-end Investment
c. Equity Fund
d. Bond Fund or Fixed Income Fund

30. This type of investment issues a limited number of non-redeemable shares during an
offering period and then traded in an organized market.
a. Open-end Investment
b. Close-end Investment
c. Equity Fund
d. Bond Fund or Fixed Income Fund

31. A retirement option of the GSIS popularly known as “The Take All” option.
a. Retirement under Republic Act 660
b. Retirement under Republic Act 1616

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions
c. Portability Law (R.A 7699)
d. Retirement under Presidential Act 1146

32. Also called "Magic 87", this option provides both annuity and lifetime pension.
a. Retirement under Republic Act 660
b. Retirement under Republic Act 1616
c. Portability Law (R.A 7699)
d. Retirement under Presidential Act 1146

33. A G-Care plan from GSIS that provides insurance coverage against fire.
a. MyShield
b. HomeShield
c. AutoShield
d. FireShield

34. Republic Act (RA) No.8291, otherwise known as “The Government Service Insurance
System Act of 1997” issued on __________ by President Marcos, was enacted to enhance
the social security coverage and benefit of the GSIS.
a. September 24, 1996
b. August 24, 1999
c. July 24, 1998
d. June 24, 1997

35. A government agency under the Department of Finance which supervises and regulates the
operations of life and non-life companies, mutual benefit associations, and trusts for
charitable uses.
a. Banko Sentral ng Pilipinas
b. Department of Finance
c. Insurance Commission
d. Philippine Deposit Insurance Corporation

36. This government agency secures the future of all employees of the Philippine government,
it provides and administers a pension fund that has the following social security benefits.
a. Social Security System (SSS)
b. Government Service Insurance System (GSIS)
c. Pagtutulungan sa Kinabukasan: Ikaw, Bangko, Industriya at Gobyerno (Pag IBIG)
d. Philippine Atmospheric, Geophysical and Astronomical Services Administration
(PAG ASA)

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

37. A GSIS loan offer that combines five different loan products into one.
a. Policy Loan
b. Consolidated loan
c. Emergency Loan
d. All-in-one Loan

38. Bank shall maintain unencumbered approved securities, valued not exceeding the current
market price, or an amount which shall not be less than____ of the total of its demand and
time liabilities (DTL).
a. 24%
b. 25%
c. 22%
d. 23%

39. An investment company which is offering for sale or has outstanding any redeemable
security of which it is the issuer.
a. Closed-End Company
b. Money Market Funds
c. Open-End Company
d. Investment Companies

40. Bonds in investment is a ______.

a. Fixed Income instrument issued for a period of more than one year. It is for the
purpose of raising capital. A promise to repay the principal along with a fixed rate
of interest on a specified date.
b. A commodity whose value is determined by the value of one or more fundamental
variables, known as underlying.
c. Emerged as hedging instruments against commodity price fluctuations, and
commodity-linked derivatives remained the sole form of such products for nearly
three centuries.
d. Level of government borrowings

41. This type of cooperative is one that promotes and undertakes savings and lending services
among its members.
a. Consumers Cooperative
b. Producers Cooperative
c. Marketing Cooperative
d. Credit Cooperative

42. According to SEBI (Stock Brokers and Sub-Brokers) Regulations, 1992, a _____ is a
member of a stock exchange and required to hold a certificate of registration from SEBI in
order to buy, sell or deal in securities.
a. Contract client

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions
b. Accountant
c. Stockbroker
d. Manager

43. Money you earn is partly spent and the rest saved for meeting futures expenses.
a. Capital
b. Insurance
c. Funds
d. Investments

44. This provides an additional source of credit, especially for small borrowers left unserved
by the banking and other financial institutions in the country.
a. Banks
b. Pawnshop
c. Companies
d. Insurance

45. A function of insurance in which the insurance joins hands with those institutions which
are engaged in preventing the losses of the society.
a. Prevention of Loss
b. Improves Efficiency
c. Helps Economic Progress
d. None of the Above

46. Total equity capital of a company is divided into equal units of small denominations.
a. Derivative
b. Mutual Fund
c. Bonds
d. Share

47. When was Republic Act No. 10607, also known as the revised Insurance Code of the
Philippines (RA 10607), signed into law?
a. August 15, 2013
b. March 11, 1998
c. September 27, 2012
d. April 9, 2005

48. A government agency under the Department of Finance which supervises and regulates the
operations of life and non-life companies, mutual benefit associations, and trusts for
charitable uses.
a. Banko Sentral ng Pilipinas
b. Department of Finance
c. Insurance Commission
d. Philippine Deposit Insurance Corporation

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

49. It is defined as accepting, for the purpose of lending or investment, of deposits of money
from the public, repayable on demand or otherwise, and withdrawable, by cheque, draft,
order or otherwise.
a. Insurance
b. Banking
c. Finance
d. Non-banking

50. In a _____, the investor will buy units of investment from the investment company.
a. Mutual Fund
b. Pension Fund
c. Unit Investment Trust Fund (IUTF)
d. Treasury Bonds

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

ANSWER KEY with EXPLANATION

1. A. Utmost Good Faith, Insurable Interest, Indemnity, Subrogation, Contribution, and

Proximate Cause are the Principles of Insurance. “Protection” is a function of
Insurance Companies.
2. B
3. D. Money market funds, Bond funds, Balanced funds, and Equity funds are the four
types of Mutual Funds. “Equity Income Fund” is a sub-classification of Stock/Equity
Funds
4. C
5. B
6. A
7. C
8. B
9. D
10. C
11. D. Health insurance is a type of insurance that helps individuals manage financial risks
associated with unexpected medical expenses.
12. C. These services include assisting clients with retirement planning, which involves
evaluating their financial goals, determining an appropriate investment strategy, and
providing guidance on retirement savings and investment options.
13. A
14. C. Investment houses or securities dealers/brokers are primarily involved in the buying
and selling of securities, such as stocks, bonds, and derivatives, on behalf of their
clients. They facilitate the execution of securities trades in the financial markets,
ensuring that the orders placed by their clients are properly processed and completed.
15. C. Property insurance is designed to provide coverage for damage or loss to property,
including homes, buildings, or vehicles.
16. A
17. C
18. B An advocacy cooperative is a type of primary cooperative that focuses on promoting
and advocating the principles and values of cooperativism. Its main purpose is to create
awareness about the benefits and importance of cooperatives among its members and
the wider public.
19. C
20. C
21. B
22. B. Statement III is only false. Because the broker accepts stock orders from the client
and then executes these directly on the exchange.
23. D

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

24. B. False, because a pawnshop shall extend a loan only if such is secured by
personal property that could be physically delivered to the control and possession of
the pawnshop.
25. B. False, because a pawner has ninety days from maturity date to redeem the pawn by
paying the principal and interest. Thus, called a Ninety (90)-Day Grace Period.
26. D
27. A
28. B
29. A
30. B
31. B
32. A
33. B
34. D
35. C
36. B
37. B
38. A
39. C
40. A
41. D
42. C
43. D
44. B
45. A
46. D
47. A
48. C
49. B
50. C

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 POLYTECHNIC UNIVERSITY OF THE PHILIPPINES
College of Accountancy and Finance
CAF Review: M&M
FIMA 101: Banking and Financial Institutions

References

(Compiled By) Prof. Jonadel Janculan. Instructional Material Fima 101 Banking and
Financial Institutions

College of Accountancy and Finance. CAF Review: M&M (February, 2023). FIMA 30023:
Banking and Financial Institutions

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