This quiz works best with JavaScript enabled. Home > Finance > Venture Capital > Venture Capital – Quiz 5 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Venture Capital Quiz 5 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. Which of the following is not a characteristic feature of venture capital firms? A) Funding just one or a small number of firms. B) Holding equity in the firms that are funded. C) Having a long-term investment horizon. D) Providing advice and assistance to the firms that are funded. Show Answer Correct Answer: A) Funding just one or a small number of firms. 2. Disinvestment can be made by: A) LPO, MPO or IBO. B) LBO, MBO or IPO. C) LLO, MLO or PKO. D) None of above. Show Answer Correct Answer: B) LBO, MBO or IPO. 3. Providers of funds and users of funds are the two parties that can be found in the financial market. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 4. You, as a representative of a VC, are going to invest USD 8 million. With a Hurdle rate of 50%, what value would you expect to receive after 4 years? What percentage of the company do you require knowing that it will be valued at USD 110 million at the end of the 4th year? A) USD $ 40, 5 mill y 40, 5%. B) USD $ 40, 5 mill y 36, 8%. C) USD $ 60, 7 mill y 55, 2%. D) USD $ 60, 7 mill y 60, 7%. Show Answer Correct Answer: B) USD $ 40, 5 mill y 36, 8%. 5. Which of the following best describes the typical outcome of venture capital investments in start-ups? A) High-risk, high-reward scenarios. B) Guaranteed short-term profits. C) Limited involvement in the business operations. D) Immediate return on investment. Show Answer Correct Answer: A) High-risk, high-reward scenarios. 6. What's a Break-even point? A) A great movie!. B) Refers to the revenues needed to cover a company's total amount of fixed and variable expenses during a specified period of time. C) Organization that provides goods or services to earn a profit. D) A nation's system for allocating its resources among its citizens. Show Answer Correct Answer: B) Refers to the revenues needed to cover a company's total amount of fixed and variable expenses during a specified period of time. 7. Companies that have been funded by Cyber Agent Ventures are: A) Foody. B) VNG. C) Tiki. D) Pricing. E) All are correct. Show Answer Correct Answer: E) All are correct. 8. Which one is wrong about Venture Capital A) Venture Capital usually provide to startups and small businesses. B) Venture capital usually comes from wealthy investors, investment banks, and any other financial institution. C) Venture capital is the financing that investors provide to starups which has short-term growth potential. D) Venture Capital is one of the forms of private equity investment. Show Answer Correct Answer: C) Venture capital is the financing that investors provide to starups which has short-term growth potential. 9. What does Barbara want to be for the holly ball product? A) A holly girl. B) A spokesperson. C) A partner. D) A holly boy. Show Answer Correct Answer: A) A holly girl. 10. Venture capital firms are usually organized as A) Corporations. B) Closed-end mutual funds. C) Non-profit business. D) Limited partnership. Show Answer Correct Answer: D) Limited partnership. 11. In a typical VC portfolio, most of the returns are from 20% of the investments. This means that A) Statistically, if a VC makes ten investments, two will be winners and create most of the gains in the fund. B) 1 in 5 VC funds will succeed in its investments. C) 95% of investments made by venture capitalists fail, but 5 % make such spectacular returns that they subsidize the failures. D) The VC will always have one fifth of the votes in the companies' decisions. Show Answer Correct Answer: A) Statistically, if a VC makes ten investments, two will be winners and create most of the gains in the fund. 12. Start-up financing, also known as start-up capital, achieves an average annual return of: A) 35 %-50 %. B) 50 %-100 %. C) 15 %-35 %. D) 5 %-15 %. Show Answer Correct Answer: A) 35 %-50 %. 13. What is the risk associated with venture capital? A) Low financial risk. B) Guaranteed return on investment. C) Potential loss of investment. D) High liquidity. Show Answer Correct Answer: C) Potential loss of investment. 14. Insurance is best suited to risk with ..... A) High frequency and low loss severity. B) Low frequency and high loss severity. C) Minimum frequency and no loss severity. D) High frequency and high loss severity. Show Answer Correct Answer: B) Low frequency and high loss severity. 15. Which of the mentioned VC funds is the largest? A) Accel partners. B) Sequoia. C) Benchmark capital. D) None of above. Show Answer Correct Answer: B) Sequoia. 16. Apart from financing, start-ups also offers expertise and network of contacts to venture capital firms. A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 17. If a venture capital-backed company goes out of business, this is referred to as: A) Acquisition. B) Still Private. C) IPO. D) Defunct. Show Answer Correct Answer: D) Defunct. 18. What is the role of venture capitalists? A) Venture capitalists provide funding and support to startups and early-stage companies. B) Venture capitalists provide loans to startups and early-stage companies. C) Venture capitalists primarily focus on marketing and advertising for startups. D) Venture capitalists are responsible for managing the day-to-day operations of startups. Show Answer Correct Answer: A) Venture capitalists provide funding and support to startups and early-stage companies. 19. Which of the following is a characteristic of venture capital? A) No risk and guaranteed return investments. B) Low risk and low return investments. C) High risk and high return investments. D) Medium risk and medium return investments. Show Answer Correct Answer: C) High risk and high return investments. 20. What role does venture capital play in the growth of start-up businesses? A) It hinders their growth by imposing strict regulations. B) It provides necessary capital and expertise to fuel their expansion. C) It only supports businesses in the healthcare industry. D) It promotes the acquisition of existing businesses. Show Answer Correct Answer: B) It provides necessary capital and expertise to fuel their expansion. 21. The term Assurance refers to ..... A) Marine Insurance Business. B) Life Insurance Business. C) Fire Insurance Business. D) Motor Vehicle Business. Show Answer Correct Answer: B) Life Insurance Business. 22. The document that describes the capital gap for the first time is commonly called: A) The Mactillan Report. B) The Macmillan Report. C) Mallciman Report. D) None of above. Show Answer Correct Answer: B) The Macmillan Report. 23. Which is the sole reinsurance company in the Indian insurance market? A) United India Insurance Company Limited. B) The Oriental Insurance Company. C) General Insurance Corporation of India. D) New India Assurance Company Limited. E) Life Insurance Corporation of India. Show Answer Correct Answer: C) General Insurance Corporation of India. 24. What is the risk level for the PEI in Early Growth Financing? A) Low risk. B) No risk. C) Medium risk. D) High risk. Show Answer Correct Answer: D) High risk. 25. What is the most common successful outcome of a venture capital investment that results in significant value multiplication? A) Initial Public Offering (IPO). B) Remaining Private. C) Acquisition. D) Defunct. Show Answer Correct Answer: A) Initial Public Offering (IPO). 26. What is meant by a convertible bond? A) Can be converted into Foreign Currency. B) Can be returned in Other form. C) Can be converted into Shares. D) Can be converted into Debentures. Show Answer Correct Answer: C) Can be converted into Shares. 27. What is the definition of an entrepreneur? A) Is pitch person. B) An entrepreneur is someone who thinks about owning a business. C) An entrepreneur is someone who creates, owns, and potentially runs a business. D) A mathematician. Show Answer Correct Answer: C) An entrepreneur is someone who creates, owns, and potentially runs a business. 28. In a Hedge Fund project, the higher the proportion of debt financing, the higher the investor's profitability? A) TRUE. B) Falso. Show Answer Correct Answer: A) TRUE. 29. The p/e (price-to-earnings ratio) is A) The same as dividend per share. B) The profit per share of a company's stock. C) The price of a share divided by the profit per share. D) What venture capitalists expect from all their invesments. Show Answer Correct Answer: C) The price of a share divided by the profit per share. 30. VC capitalists can earn A) A portion of the firm's equity. B) High returns. C) Small returns but influence on the company direction. D) High returns, a chunk of the company's equity as well as influence on the company decisions. Show Answer Correct Answer: D) High returns, a chunk of the company's equity as well as influence on the company decisions. ← PreviousNext →Related QuizzesFinance QuizzesVenture Capital Quiz 1Venture Capital Quiz 2Venture Capital Quiz 3Venture Capital Quiz 4Venture Capital Quiz 6 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books