CMAT General Awareness 2 — Questions and Answers
Question 1: Which of the following best describes 'Foreign Direct Investment' (FDI)?
- Buying foreign currency
- Investing in foreign stocks via an exchange
- A company establishing business operations in another country (Correct answer)
- Lending money to foreign governments
Correct answer: A company establishing business operations in another country
FDI involves a firm making a physical investment, such as building a factory, in a foreign country.
Question 2: The S&P 500 is an index tracking the performance of how many large U.S. companies?
- 100
- 300
- 500 (Correct answer)
- 1000
Correct answer: 500
The S&P 500 tracks 500 large-cap U.S. publicly traded companies across various sectors.
Question 3: What does NASDAQ primarily list?
- Energy and commodity companies
- Technology and growth companies (Correct answer)
- Government bonds
- Foreign currency pairs
Correct answer: Technology and growth companies
NASDAQ is known for listing technology and growth-oriented companies like Apple, Google, and Amazon.
Question 4: What is 'venture capital'?
- Loans offered by banks to startups
- Government grants for new businesses
- Private investment funding for early-stage high-growth companies (Correct answer)
- Bonds issued by startup firms
Correct answer: Private investment funding for early-stage high-growth companies
Venture capital is private equity funding provided to early-stage startups with high growth potential in exchange for equity.
Question 5: Which financial statement shows a company's assets, liabilities, and equity at a specific point in time?
- Income Statement
- Cash Flow Statement
- Balance Sheet (Correct answer)
- Statement of Retained Earnings
Correct answer: Balance Sheet
The balance sheet provides a snapshot of a company's financial position at a given date.
Question 6: In economics, 'opportunity cost' refers to:
- The total cost of producing a product
- The value of the next best alternative forgone (Correct answer)
- The cost of raw materials
- The price increase due to inflation
Correct answer: The value of the next best alternative forgone
Opportunity cost is the value of the best alternative given up when making a decision.
CMAT General Awareness 2
Which of the following best describes 'Foreign Direct Investment' (FDI)?