Fin630View more random threads:
- CS101 subjective Exam 1 december fall 2010
- Current Paper of CS201 Introduction to Programming 7 August...
- CS615 Software Project Management Current Midterm december...
- Final Term Current Paper ENG301 Business Communication 12...
- Final Term Current Paper CS614 Data Warehousing 18 August...
- cs610computernetwork midterm paper 1 december fall 2010
- mgt411 subjective current paper fall 2010 on 18/02/2011
- Mgt101 final term paper fall 2010 on 18-02-2011 with screen...
- current cs402 final term paper fall 2010 on 12 feb 2011
- Final Term Current Papers ECO401 Economics 15 August 2010
Which of the following is an example of a financial asset?
Factories
Options
Commercial properties
Gold
The price at which a security dealer sells a security is known as:
Bid price
Market price
Offer price
Order price
__________ is a temporary restriction on program trading in a particular security or market, usually to reduce dramatic price movements.
SuperDot
NYSE direct
Trading curb
Ticker tape
___________ might not have historical perspective in background but it will find a place in the future depending on the product or industry.
Growth company
Value company
Large cap company
Small cap company
The primary purpose of the liquidity ratios is to determine:
The amount of working capital tied up in inventory
The ability of a firm to pay off short-term obligations
The relative level of short-term debt
The amount of earnings paid to shareholders
Which of the following statement is TRUE?
SIC codes have 10 divisions
SIC codes have 11 divisions
SIC codes have 15 divisions
SIC codes have 9 divisions
Mutual funds pool the funds of savers and can be used to buy _____________.
Shares in mutual savings banks only
A variety of financial instruments
Shares in the Federal Reserve System
None of the given options
The concept that it is not possible to consistently outperform the market by using any information that the market already knows, except through luck refers to which of the following?
Dow theory
Dividend discount model
Efficient market hypothesis
Prospect theory
Which of the following index is computed by adding the collective market capitalizations of its members and dividing it by the number of securities in the index?
Price Weighted-Index
Capitalization Weighted-Index
Unweighted Index
Volume Weighted Index
Which of the following statement is CORRECT?
The sensitivity of a coupon bond price to a change in its yield is constant whether yield to maturity increases or decreases
The sensitivity of a coupon bond price to a change in its yield is inversely related to the bond's yield to maturity
The sensitivity of a coupon bond price to a change in its yield is directly related to the bond's yield to maturity
The sensitivity of a coupon bond price to a change in its yield is greater for increases in yield to maturity
Which of the following measures the sensitivity of an asset's price to interest rate movements, expressed as a number of years?
Duration
Yield to maturity
Convexity
Immunization
Which of the following statement is FALSE regarding bond duration?
Bond duration is inversely related to coupon rate
Duration of a zero-coupon bond equals its time to maturity
Holding maturity constant, a bond’s duration is higher when the coupon rate is lower
Duration is longer than maturity for all bonds except zero coupon bonds
Which of the following is referred to as risk-free bond?
Government bond
Municipal bond
Sovereign bond
Junk bond
The risk inherent to the entire market or entire market segment is known as:
Systematic risk
Issuer risk
Specific risk
Nonsystematic risk
Which of the following measures the compound growth rate over time?
Geometric mean
Standard deviation
Arithmetic mean
Correlation coefficient
All of the following statements concerning unsystematic risk are correct EXCEPT:
It cannot be reduced by diversification
It is the portion of total risk unique to the particular firm
It may be affected by the competence of the firm’s management
Such risk may be independent of factors affecting other industries
Which of the following risk is avoidable through proper diversification?
Portfolio risk
Systematic risk
Nonsystematic risk
Total risk
Markowitz diversification is based on:
Random diversification
Non-random diversification
Horizontal diversification
Vertical diversification
Which of the following is defined as a line that graphs the systematic, or market, risk versus return of the whole market at a certain time and shows all risky marketable securities?
Security market line
Capital market line
Budget line
Value line
When beta of a security >1.0, it indicates that:
Security is more risky than the market
Security is less risky than the market
Security is as risky as the market
Security is not risky at all
When beta of a security <1.0, it indicates that:
Security is more risky than the market
Security is less risky than the market
Security is as risky as the market
Security is not risky at all
The exploitation of security mispricing in such a way that risk-free economic profits may be earned is called ___________.
Zero
Negative
All of the given options
Positive
The APT was developed in 1976 by ____________.
Lintner
Modigliani and Miller
Ross
Sharpe
The ____________ provides an unequivocal statement on the expected return-beta relationship for all assets, whereas the _____________ implies that this relationship holds for all but perhaps a small number of securities.
APT, CAPM
APT, OPM
CAPM, APT
CAPM, OPM
Which of the following is a strategy of monitoring and offsetting various risk factors in an investment portfolio with the aim of stabilizing investment returns?
Portfolio management
Project management
Risk management
Investment management
Which of the following are regulated by Commodity Futures Trading Commission (CFTC)?
Options
Futures
Swaps
Forwards
Which of the following is defined as a trader, who trades or takes position without having exposure in the physical market, with the sole intention of earning profit?
Hedger
Arbitrager
Speculator
Broker
Program trading calls for which of the following?
Computerized trigger points for trades
The use of short hedge position
The use of only call option
The use of long hedge position
Which of the following statement is FALSE regarding short hedge?
The value of short hedge contracts is equal the value of the stock portfolio
A short futures hedge is appropriate when you know you will purchase an asset in the future and want to lock in the price
A short futures hedge is appropriate when you know you will sell an asset in the future & want to lock in the price
A short hedge reduces or possibly eliminates the risk taken in a long position
Which of the following hedge involves an additional source of basis risk due to the difference between the asset being hedged and the asset underlying the futures?
Long hedge
Short hedge
Cross hedge
Stack hedge
S & P 500 future stock index closes at $ 275 and spot price is $ 230. What is its basis?
40
45
50
55
At the NYSE, the auction process for each listed stock is assigned to which of the following?
Specialist
Broker
Dealer
Member
An investor will purchase shares of companies in the development stage for:
Current income
Current income and capital gains
Passive losses to offset other income
Capital gains only
Creditor's claim on the assets of a company is known as:
Liability
Equity
Common Stock
Dividend
Which of the formula is TRUE for calculating retained earnings?
Retained Earnings = Net Earnings – Dividends
Retained Earnings = Net Earnings + Long term debt
Retained Earnings = Net Earnings + Short term debt
Retained Earnings = Net Earnings + Dividend
Which of the following is NOT a test of semi-strong form efficiency?
Stock splits
Accounting changes
Dividend announcements
Insider transactions
When the bond approaches its maturity, the market value of the bond approaches to which of the following?
Intrinsic value
Book value
Par value
Historic cost
The value of a bond is directly derived from which of the following?
Cash flows
Coupon receipts
Par recovery at maturity
All of the given options
A coupon bond is a bond that:
Pays interest on a regular basis
Does not pay interest on a regular basis but pays a lump sum at maturity
Can always be converted into a specific number of shares of common stock in the issuing
company
Can always be converted into a specific number of shares of preffered stock in the issuing
Company
The smaller the coupon of a bond,(other things being equal), the duration of bond will be:
Equal
There is no connection between two
Greater
Smaller
The percentage of the purchase price of securities that an investor must pay with his or her own cash is known as:
Margin call
Maintenance margin
Initial margin
SPAN margin
Which of the following is a characteristic of line chart?
It is efficient in showing more details
It is simplest and most familiar chart
It show the highest degree of accuracy
It can be used for comparing three values
Which of the following is LEAST likely an assumption behind the semi-strong form of the EMH?
In regard to timings, news and announcements are independent of each other.
All information is cost free and available to everyone at the same time.
Investors adjust their expectations rapidly when confronted with new information.
Investors cannot achieve abnormal returns using fundamental analysis.
The implication of the Weak-form EMH is that:
All public and private information is rapidly incorporated into security prices
Technical analyst can make excess returns on filter rules but not runs rules
There should not be any relation between past price changes & future price changes
The investors cannot achieve abnormal returns using fundamental analysis
Autocorrelation tests & tests of predictive power of earnings surprises apply to which forms of the EMH?
Autocorrelation Earnings surprises
1. Semi-strong Strong
2. Weak Semi-strong
3. Semi-strong Weak
4. Strong Weak
1
2
3
4
Which form of the Efficient Market Hypothesis implies that an investor can achieve positive abnormal returns on average by using technical analysis?
Strong form
Weak form
Semi-strong form
None of the given options
Compared to a public offering, a private placement of the debt securities LIKELY has:
More liquidity and a lower yield
Less liquidity and lower yield
Less liquidity and a higher yield
More liquidity and a higher yield
Which of the following statements about the risks of the bond investing is MOST accurate?
A bond rated AAA has no credit risk.
A bond with call protection has volatility risk.
A U.S. Treasury bond has no reinvestment risk.
A zero-coupon bond has less interest rate risk
Which of the following statements about exchange traded derivatives is LEAST accurate?
They are liquid.
They are standardized contracts.
They carry significant default risk.
They have no credit risk.
Derivatives are LEAST likely to provide or improve:
Liquidity
Price information
Inflation reduction
Hedging
A futures contract is LEAST likely:
Exchange traded
A contingent claim
Adjusted for profits and losses daily
A standardized instrument
Compared to forward contracts, future contacts are LEAST likely to be:
Standardize
Large in size
Less subject to default risk
Settled daily
Which of the following statements about covariance and the correlation coefficient is LEAST accurate?
The correlation coefficient is a measure of the linear association between two variables.
Covariance is a measure of the how the returns of the two assets tend to move together.
The correlation coefficient is computed by dividing the returns covariance of the assets
by the individual return variances for the two assets.
The returns covariance between two assets is equal to the correlation between returns of the two assets, times the product of their returns standard deviation.
In determining the appropriate asset allocation for client’s investment accounts, the manager should:
Consider only the investor’s risk tolerance
Rely on forecasts of future economic conditions
Consider the investor’s risk tolerance and future needs, but not market conditions
Should consider only the unique needs of the investors
Which of the following statements regarding company and stock analysis is LEAST accurate?
A defensive company has earnings relatively insensitive to downturns in economy.
Cyclical stocks have betas greater than one.
A growth stock is the stock of a firm with rapidly increasing earnings.
Speculative companies have highly risky assets but have potential to produce huge earnings.
The most attractive investment opportunities when the economy is slowing and entering a recession are:
Commodities and commodity-producer stocks
Stocks and commercial property
Bonds and interest-sensitive stocks
Cyclical stocks and bonds
Define nonsystematic risk. How it can be reduced? (3)
What is meant by “Interest rate tradeoff"? (3)
Define call options. (3)
Define Return on Equity (ROE). What does it show? (3)
Many analysts refer convexity as more precise version of duration. Do you agree with this statement? (5)
Describe the two broad steps involved in making investment decisions. (5)
Why do we need speculators in futures market? (5)
Saving and investment are interchangeable terms. Do you agree with this statement? Justify your answer. (5)
Sponsored Links
Urgent call: 03455242488. | Virtual University Assignments
Virtual University GDBs | Virtual University Papers | Vu Projects | Vu Handouts
About Expert
There are currently 1 users browsing this thread. (0 members and 1 guests)