Sponsored Links


Results 1 to 1 of 1

Thread: fin630 current subjective and objective paper fall 2010 on 19-02-2011

  1. #1
    Administrator Xpert's Avatar
    Join Date
    May 2010
    Location
    Jhelum
    Posts
    6,217

    fin630 current subjective and objective paper fall 2010 on 19-02-2011

    Sponsored Links


    Fin630

    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
    Attached Files Attached Files

  2. Sponsored Links

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Replies: 0
    Last Post: 02-21-2011, 04:52 AM
  2. Replies: 0
    Last Post: 02-21-2011, 04:49 AM
  3. Replies: 0
    Last Post: 02-21-2011, 04:40 AM
  4. Replies: 0
    Last Post: 02-20-2011, 12:34 AM
  5. Replies: 0
    Last Post: 02-19-2011, 11:37 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  
-: Vuhelp Disclaimer :-
None of the files shown here are hosted or transmitted by this server. The links are provided solely by this site's users. The administrator's or staff of Vuhelp.net cannot be held responsible for what its users post, or any other actions of its users. You may not use this site to distribute or download any material when you do not have the legal rights to do so. It is your own responsibility to adhere to these terms. If you have any doubts about legality of content or you have any suspicions, feel free to contact us.
Online Education | JhelumSoft