1) the duration of a 5-year zero-coupon bond is ____ years.
a.4.5
b.5
c.5.5
d.3.5
2) a japanese firm issued and sold a pound-denominated bond in the united kingdom. a
u.s. firm issued bonds denominated in dollars but sold the bonds in japan. which one of
the following statements is correct?
a.both bonds are examples of eurobonds.
b.the japanese bond is a eurobond, and the u.s. bond is termed a foreign bond.
c.the u.s. bond is a eurobond, and the japanese bond is termed a foreign bond.
d.neither bond is a eurobond.
3) the yield to maturity of a 10-year zero-coupon bond with a par value of $1,000 and a
market price of $625 is _____.
a.4.8%
b.6.1%
c.7.7%
d.10.4%
4) the delta of a put option on a stock is always __________.
a.between 0 and -1
b.between -1 and 1
c.positive but less than 1
d.greater than 1
5) you are cautiously bullish on the common stock of the wildwood corporation over
the next several months. the current price of the stock is $50 per share. you want to
establish a bullish money spread to help limit the cost of your option position. you find
the following option quotes:
to establish a bull money spread with calls, you would _______________.
a.buy the 55 call and sell the 45 call
b.buy the 45 call and buy the 55 call
c.buy the 45 call and sell the 55 call
d.sell the 45 call and sell the 55 call
6) a mutual fund that attempts to hold quantities of shares in proportion to their
representation in the market is called a __________ fund.
a.stock
b.index
c.hedge
d.money market
7) according to the capital asset pricing model, a security with a _________.
a.negative alpha is considered a good buy
b.positive alpha is considered overpriced
c.positive alpha is considered underpriced
d.zero alpha is considered a good buy
8) on a standard expected return versus standard deviation graph, investors will prefer
portfolios that lie to the _____________ of the current investment opportunity set.
a.left and above
b.left and below
c.right and above
d.right and below
9)
the figure above depicts a situation where:
a.prices are sticky, but output is flexible.
b.prices are flexible, but output is constant.
c.prices and output are both flexible.
d.prices are sticky, and output is constant.
10) a supply-side economist would likely agree with which of the following statements?
a.real output and aggregate employment are primarily determined by aggregate
demand.
b.real income will rise when government expenditures and tax rates increase.
c.real output and aggregate employment are primarily determined by tax rates.
d.increasing the money supply will increase real output without causing higher
inflation.
11) in 2010, the ___ countries with the largest capitalization of equities made up
approximately 60% of the world equity portfolio.
a.2
b.4
c.5
d.12