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1) the maximum maturity on commercial paper is _____.
a.270 days
b.180 days
c.90 days
d.30 days
2) suppose you have maxed out your allowable contributions to your tax-sheltered
retirement plans and you still want to shelter income. the best choice of investment for
you to minimize the tax bill is to invest in _________.
a.a bond portfolio
b.stocks with high dividend yields
c.a blended stock and bond portfolio containing zero-coupon bonds
d.stocks with low or zero dividend yields
3) a bond currently has a price of $1,050. the yield on the bond is 6%. if the yield
increases 25 basis points, the price of the bond will go down to $1,030. the duration of
this bond is ____ years.
a.7.46
b.8.08
c.9.02
d.10.11
4) the commission structure on a stock purchase is $20 plus $.02 per share. if you
purchase four round lots of a stock selling for $56, what is your commission?
a.$20
b.$22
c.$26
d.$28
5) strips and straps are variations of __________.
a.straddles
b.collars
c.money spreads
d.time spreads
6) most tests of semistrong efficiency are _________.
a.designed to test whether inside information can be used to generate abnormal returns
b.based on technical trading rules
c.unable to generate any evidence of market anomalies
d.joint tests of market efficiency and the risk-adjustment measure
7) models of financial markets that emphasize psychological factors affecting investor
behavior are called _______.
a.data mining
b.fundamental analysis
c.charting
d.behavioral finance
8) the quick ratio is a measure of a firm's __________.
a.asset turnover
b.market valuation
c.liquidity
d.interest burden
9) an active asset allocation strategy involves _________.
a.investing in the stock of companies that are price takers
b.maintaining approximately the same proportions of a portfolio in each asset class over
time
c.varying the proportions of a portfolio in each asset class in response to changing
market conditions
d.selecting individual securities in different sectors that are believed to be undervalued
10) when a stock price breaks through the moving average from below, this is
considered to be ______.
a.the starting point for a new moving average
b.a bearish signal
c.a bullish signal
d.none of these options
11) the open interest on silver futures at a particular time is the number of __________.
a.all outstanding silver futures contracts
b.long and short silver futures positions counted separately on a particular trading day
c.silver futures contracts traded during the day
d.silver futures contracts traded the previous day
12) if the daily returns on the stock market are normally distributed with a mean of .
05% and a standard deviation of 1%, the probability that the stock market would have a
return of -23% or worse on one particular day (as it did on black monday) is
approximately __________.
a..0%
b..1%
c.1%
d.10%
13) ______ are partnerships of investors with portfolios that are larger than most
individual investors but are still too small to warrant managing on a separate basis.
a.commingled funds
b.closed-end funds
c.reits
d.mutual funds
14) __________ is not a money market instrument.
a.a certificate of deposit
b.a treasury bill
c.a treasury bond
d.commercial paper
15) you are considering investing in a no-load mutual fund with an annual expense ratio
of .6% and an annual 12b-1 fee of .75%. you could also invest in a bank cd paying
6.5% per year. what minimum annual rate of return must the fund earn to make you
better off in the fund than in the cd?
a.7.1%
b.7.45%
c.7.25%
d.7.85%
