The advance estimate of GDP predicts direction of quarterly change in real GDP growth
approximately what percent of the time?
a. 10%.
b. 25%.
c. 75%.
d. 90%.
Approximately what percentage of futures contracts is closed by offset before the
contract expires:
a. 25
b. 50
c. 95
d. 75
Which of the following has 10 economic sectors, 24 industry groupings, 64 industries
and 139 sub-industries?
a. SIC
b. NAICS
c. GICS
d. Value Line Investment Survey
Bonds trade on an accrual interest basis. This means an investor:
a. can sell a bond at any time without losing the interest that has accrued
b. can buy a bond at any time and gain the interest accrued from the time of the last
payment
c. can sell a bond at any time and retain the interest portion of the bond
d. buy a bond at any time and receive an immediate interest check
Which of the following is NOT a potential advantage of speculating in futures?
a. Leverage
b. Ease of transacting
c. Low transactions costs
d. High and narrow probability distribution of expected returns
In-house trading refers to:
a. trades made only on the floor of the exchanges
b. direct trades made between OTC dealers
c. trades by fund managers without the use of brokers or exchanges
d. trades made between specialists on the NYSE
Brotech Unlimited sells at $40 per share, and its latest 12 month earnings were $8 per
share, of which $3.20 per share were paid as dividends. (a) What is Brotech’s current
P/E ratio?
(b) If Brotech’s earnings are expected to grow by 9 percent per year, what is the
projected price for next year assuming that the P/E ratio remains constant?
(c) If you had a required rate of return of 15 percent, expected the dividend payout ratio
to remain constant, and dividends to grow at a rate of 9 percent, would you buy this
stock? Explain your answer.
Which of the following is not considered an interest-rate sensitive industry?
a. building industry
b. banking industry
c. financial services industry
d. tobacco industry
Generally, when interest rates fall, bond prices
a. rise.
b. fall.
c. remain unchanged.
d. rise or fall depending on the expected inflation premium.
The so-called “global settlement” negotiated by the SEC, NYSE and NASD with a
number of brokerage firms was intended to:
a. ensure more disclosure of relevant information to investors.
b. separate investment banking from analyst research.
c. stop the practice of buy, sell or hold recommendations in analysts’ reports.
d. all of the above
The optimal portfolio is the efficient portfolio with the
a. lowest risk
b. highest risk
c. highest utility
d. least investment
If a trading rule has been tried on data other than that used to produce the rule and
found to be accurate, this is known as:
a. consistency.
b. relative strength.
c. out-of-sample validity.
d. a filter rule.
The auditor’s report:
a. guarantees accuracy.
b. guarantees the quality of the earnings.
c. attests that the statements are a fair presentation of financial position.
d. all of the above are true
ROA is the product of
a. net income margin and turnover.
b. book value and turnover.
c. leverage and book value.
d. net income margin and leverage.
When the covariance is positive, the correlation will be:
a. positive
b. negative
c. zero
d. impossible to determine
The Coffeehouse Portfolio suggests investors hold:
a. 50% bonds, 50% equities (including the S&P 500, Large Cap Value, International,
Small Cap, and Small Cap Value stocks)
b. 40% bonds, 60% equities (including the S&P 500, Large Cap Value, International,
Small Cap, Small Cap Value, and REITs)
c. 60% bonds, 40% equities (in two index funds)
d. 40% bonds, 60% equities (in two index funds)
An analyst employed by a pension fund to search for stocks for the fund to invest in
would be referred to as:
a. a sell-side analyst.
b. a buy-side analyst.
c. an institutional analyst.
d. a money manager.
Which of the following European countries experienced a debt crisis in recent years?
a. Germany.
b. Great Britain.
c. Greece.
d. France.
Technical analysts agree with the fundamental analysts regarding the usefulness of
accounting dat
a.
The U.S. is moving from an ———- society to an ———– society.
a. agricultural; industrial
b. agricultural; information
c. industrial; information
d. industrial; international
Provide an example of two industries that might have low correlation with one another.
Give an example that might exhibit high correlation.
You would expect a lower PSR for a retail company than for a biotechnology company.
Investors interested in buying stocks that report bad news and suffer a sharp decline
should buy the first day bad news is reported.
Since performance is not always consistent, an industry’s track record should not be of
much concern to investors.
Explain how writing option contracts (both puts and calls) can generate income for
owners of the underlying stock.
What is the difference between hedgers and speculators in the futures markets?
The par value of Blaze, Inc. common stock is $0.50, the earnings per share is $4, the
market price is $60, the dividend per share is $1. Calculate the dividend yield.
The net asset value of a mutual fund does not consider unrealized capital gains.
What are some of the problems associated with using risk-adjusted portfolio
performance measures?