FIN630 Midterm Past Paper 2

MIDTERM EXAMINATION

Spring 2010

FIN630- Investment Analysis & Portfolio Management (Session - 5) Time: 60 min Marks: 44

Q1. _________ provides an automatic execution of limit orders up to 1,099 shares at the best bid or offer. (1 marks)

1. SuperDOT
2. NASDAQ
3. Auction market
4. NYSE direct

Correct answer: NASDAQ

Q2. The trading of listed securities in the NASDAQ market is known as: (1 marks)

1. Primary market
2. Third market
3. Secondary market
4. Fourth market

Correct answer: Third market

Q3. A self-regulatory body that licenses brokers and generally oversees the trading practices of Over the counter(OTC) securities is known as (1 marks)

1. Securities and Exchange Commission (SEC)
2. National Association of Security Dealers (NASD)
3. Initial Public Offering (IPO)
4. Offered for Sale (OFS)

Correct answer: National Association of Security Dealers (NASD)

Q4. Companies that have historically paid a larger than average percentage of their profit as dividend to their shareholders is known as: (1 marks)

1. Blue chip companies
2. Cyclical companies
3. Growth companies
4. Income companies

Correct answer: Income companies

Q5. Which of the following is suitable for analyzing short term investments? (1 marks)

1. Horizontal analysis
2. Fundamental analysis
3. Technical analysis
4. Ratio analysis

Q6. A procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value is known as. (1 marks)

1. Dividend Discount Model
2. The Residual Earning Model
3. None of the given options
4. Capital Asset Pricing Model

Correct answer: Dividend Discount Model

Q7. A good time is characterized by which of following situation? (1 marks)

1. 
2. Market prices moving above the moving average
3. Market prices moving below the moving average
4. 
5. Market prices exactly same as moving average
6. 
7. None of the given options
8. 

Q8. (1 marks)

1. Which of the following statement is FALSE about Elliot Wave Theory? It made extensive use of Fibonacci series
2. 
3. It is based on repeating 8 waves’ cycles
4. 
5. It identified three movements in security prices
6. 
7. It was proposed by R.N. Elliot
8. 

Q9. Which of the following depicts ratio of share price to stockholder equity? (1 marks)

1. Debt coverage ratio
2. 
3. Price-to-sales ratio
4. 
5. Price-to-market value ratio
6. 
7. Price-to-book value ratio
8. 

Q10. On which of the following financial statements, revenues and expenses can be found? (1 marks)

1. Balance sheet
2. Income statement
3. Statement of cash flows
4. Statement of changes in equity

Correct answer: Income statement

Q11. Which of the following is a basket of stocks that tracks a particular sector, investment style, geographical area, or the market as a whole? (1 marks)

1. Exchange traded fund
2. Open-end fund
3. Closed-end fund
4. Unit investment trust

Correct answer: Exchange traded fund

Q12. Which of the following is defined as an investment strategy that involves ongoing buying and selling actions by the investors? (1 marks)

1. Make or Buy strategy
2. Active strategy
3. Passive strategy
4. Buy-and-Hold strategy

Correct answer: Active strategy

Q13. Which of the following is an example of brokerage fee charged by a stockbroker? (1 marks)

1. Margin profit
2. Insurance premium
3. Transaction cost
4. Capital expenditure

Correct answer: Transaction cost

Q14. Which of the following would be considered as the most bullish indicator? (1 marks)

1. A price decrease with heavy volume
2. A price increase with small volume
3. A price increase on heavy trading
4. No change in price but an increase in volume

Correct answer: A price increase on heavy trading

Q15. Financial securities with a maturity of less than a year from their original issue date are sold in which of following market? (1 marks)

1. Money market