about finance all questions are multiple-choice

Dec 11th, 2014
Steve1995
Category:
Business & Finance
Price: $100 USD

Question description

7.  Which of the following are risks unique to international or global business/operations?

A.  Exchange rate risk

B.  Interest rate risk

C.  Default risk

D.  A and B

E.  A and C

8.  Which of the following likely have a direct relationship with stock prices?

A.  Unemployment rate

B.  GDP

C.  Interest rates

D.  All of the above

E.  None of the above

9.  If a difference is perceived between a security’s stock price and the same security’s model price, we may have an opportunity for _______________.

A.  Beta

B.  CAPM

C.  SML

D.  Arbitrage

E.  None of the above

10.  Which of the following is not a variable in the Gordon Growth Model.

A.  Stock price

B.  Exercise price

C.  Growth rate in dividends

D.  Rate of return

E.  Estimate of next upcoming dividend

11.  If a firm utilizes a great deal of borrowed money as a percentage of its overall capital structure, this would most likely be indicated by a(n) __________ ratio.

A.  Liquidity

B.  Asset turnover

C.  Leverage

D.  Short-term solvency

E.  None of the above

12.  If a firm has low inventory turnover, this would be indicated most directly by a(n) __________ ratio.

A.  Liquidity

B.  Asset turnover

C.  Leverage

D.  Short-term solvency

E.  None of the above

13.  If an asset can be converted to cash quickly without significant loss of value, the asset is most aptly characterized as _____________.

A.  Valuable

B.  Leveraged

C.  Alpha

D.  Liquid

E.  None of the above

14.  If interest rates rise materially, what should happen to the value of PO tranches?

A.  The value should rise

B.  The value should fall

C.  The value may either rise or fall

D.  The value should not change

E.  None of the above

15.  High volume trading at prices significantly at odds with fundamental value is the textbook definition of a(n) ______________.

A.  Efficient market

B.  Derivative market

C.  Riskless asset

D.  Asset bubble

E.  None of the above

16.  Perfectly efficient markets ______________.

A.  Are full of arbitrage opportunities

B.  Require material irrationality

C.  Accurately reflect all material information regarding securities prices

D.  All of the above

E.  None of the above

17.  If small firms systematically outperform large firms from the standpoint of return, this is an example of a(n) ____________.

A.  Empirical pricing model

B.  Efficient market

C.  Empirical pricing anomaly

D.  All of the above

E.  None of the above

18.  Which of the following line items lend supporting evidence with regards to market efficiency?

A.  PEAD

B.  Size effect

C.  Hemline indicator

D.  Super Bowl Index

E.  None of the above

19.  If earnings announcements can be utilized in such a way as to consistently realize abnormal returns, which of the following might be true?

A.  Markets are semi-strong-form efficient

B.  Markets are strong-form efficient

C.  Markets are weak-form efficient

D.  Markets are perfectly efficient

E.  Markets are generally efficient

20.  In __________ markets, security prices accurately reflect all information, both public and private.

A.  Weak-form

B.  Semi-strong-form

C.  Strong-form

D.  None of the above

E.  All of the above

21.  ___________ describes the relationship between option-based contingent claims and underlying securities.

A.  Arbitrage

B.  Put-call parity

C.  Efficiency

D.  None of the above

E.  All of the above

22.  In a perfectly efficient market, it is unlikely for an investor to consistently beat the market with which of the following?

A.  Call options

B.  Straddles

C.  Futures

D.  Forwards

E.  All of the above

23.  A _______________ is not a derivative security.

A.  Bermudan option

B.  forward contract

C.  CMO

D.  CDS

E.  None of the above

24.  If an investor judges a security to be undervalued, maximum benefit per dollar allocated could be achieved by _______________.

A.  Buying the security

B.  Buying call options on the security

C.  Buying put options on the security

D.  Selling the security short

E.  Buying a straddle

25.  Which of the following variables is not a part of the Black-Scholes model of option pricing?

A.  Beta

B.  Alpha

C.  Variance

D.  A and B

E.  B and C

26.  If an investor wants to short volatility, he or she might ___________ options.

A.  Buy

B.  Write

C.  Short

D.  A and B

E.  B and C

27.  If an investor wants to buy volatility, he or she might ___________ options.

A.  Buy

B.  Write

C.  Short

D.  A and B

E.  B and C

28.  A ____________ is a de facto call option on interest rates.

A.  Call

B.  Put

C.  Cap

D.  Floor

E.  Collar

29.  A credit default ____________ is a type of derivative.

A.  Swap

B.  Future

C.  Forward

D.  Option

E.  None of the above

30.  A _________ position in at-the-money put options yields a profit for a speculator if the underlying security _________ significantly in price.

A.  Long/Rises

B.  Long/Falls

C.  Short/Rises

D.  All of the above

E.  None of the above


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