Lesson 2.1.2a
2.1.2a External sources of finance Quiz: Pearson Edexcel Business, Unit 2
20 questions
In partnership with Revision Ninja
Lesson 2.1.2a, External sources of finance: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 2: Managing business activities, written with Revision Ninja.
Host it live on the board and students join with a game code on their own devices, or revise alone with Free Play. The answers are revealed in the game.
The 20 questions
-
Which of the following is an external source of finance for a business?
- Bank loan
- Sale of assets
- Personal savings
- Retained profit
-
What type of finance matches individual lenders with borrowers through online platforms?
- Crowdfunding
- Venture capital
- Peer-to-peer funding
- Business angel
-
What term describes a wealthy individual who invests personal capital into high-risk start-ups?
- Peer lender
- Business angel
- Trade creditor
- Venture capitalist
-
What is a common characteristic of finance provided by family and friends?
- Flexible repayment terms
- High interest rates
- Loss of control
- Strict collateral rules
-
Which finance method raises small amounts of money from a large public crowd online?
- Peer-to-peer funding
- Venture capital
- Leasing
- Crowdfunding
-
What form of external finance allows a business to delay paying its suppliers?
- Trade credit
- Peer-to-peer lending
- Bank overdraft
- Share capital
-
Which external source involves specialist firms investing large sums in return for equity?
- Bank overdraft
- Trade credit
- Bank loan
- Venture capital
-
What is a major risk of borrowing money from family and friends?
- Strict legal terms
- Loss of ownership
- High interest rates
- Strained personal relationships
-
Which external source may come with no repayment obligation but has strict conditions on use?
- Bank loan
- Bank overdraft
- Government grant
- Trade credit
-
Which benefit does crowdfunding offer that a traditional bank loan does not?
- No internet required
- Free marketing exposure
- Lower tax rates
- Guaranteed funding
-
Which external source is most suitable for a high-growth start-up that needs large sums and expert advice?
- Venture capital
- Owner's savings
- Retained profit
- Sale of stock
-
Which feature is typical of a bank loan as a source of finance?
- Non-repayable capital
- Loss of control
- Fixed interest repayments
- Surrender of equity
-
Which external source of finance is most closely linked to a supplier allowing a business to pay later?
- Business angel
- Trade credit
- Crowdfunding
- Peer-to-peer funding
-
What is a major advantage of peer-to-peer lending for small businesses?
- Government guaranteed
- Permanent equity capital
- Easier to access
- Zero interest charged
-
Which external source of finance requires a business owner to give up equity?
- Business angel
- Trade credit
- Government grant
- Bank overdraft
-
Which feature is characteristic of a government or regional development grant?
- Monthly interest charges
- Automatic approval
- Loss of equity
- Non-repayable funds
-
Which external source would a firm most likely use to fund a short-term gap in cash?
- Bank overdraft
- Stock market flotation
- Venture capital
- Business angel investment
-
Compared to venture capital firms, business angels are typically what type of investor?
- Crowd platforms
- Government bodies
- Wealthy individuals
- Institutional banks
-
Which external source may bring useful contacts and mentoring as well as finance?
- Business angel
- Trade credit
- Overdraft
- Grant
-
A firm chooses an external source that requires it to publish more information to outside investors. Which source is most likely?
- Venture capital
- Sale of a van
- Retained profit
- Owner's savings
Related quizzes
- Internal sources of finance Quiz · 2.1.1 · 20 questions
- Methods of finance Quiz · 2.1.2b · 20 questions
- Limited and unlimited liability Quiz · 2.1.3 · 20 questions
- Business plans and cash-flow forecasts Quiz · 2.1.4 · 20 questions
- Sales forecasting Quiz · 2.2.1 · 20 questions
- Sales volume, revenue and costs Quiz · 2.2.2 · 20 questions
- Break-even analysis Quiz · 2.2.3 · 20 questions
- Budgets and variance analysis Quiz · 2.2.4 · 20 questions
- Profit calculations and profit margins Quiz · 2.3.1a · 20 questions
- Profit versus cash and improving profitability Quiz · 2.3.1b · 20 questions