FIN630 Midterm Past Paper 4

MIDTERM EXAMINATION

Spring 2010

FIN630- Investment Analysis & Portfolio Management (Session - 2) Time: 60 min Marks: 44

Q1. Which of the following is NOT a fixed income security? (1 marks)

1. Bonds
2. Preferred stock
3. Saving deposits
4. Options

Correct answer: Options

Q2. ________ are qualified and regulated professionals who trade shares and other securities through market makers on behalf of investors. (1 marks)

1. Stock brokers
2. Members
3. Specialists
4. Day traders

Correct answer: Stock brokers

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. __________ is a temporary restriction on program trading in a particular security or market, usually to reduce dramatic price movements. (1 marks)

1. SuperDot
2. NYSE direct
3. Trading curb
4. Ticker tape

Correct answer: Trading curb

Q5. 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

Q6. In candlestick chart, what does white body candle depict? (1 marks)

1. Prices are moving down
2. 
3. Prices are moving up
4. Prices are constant
5. 
6. Prices are fluctuating
7. 

Correct answer: Prices are moving up

Q7. Which of the following is a popular price pattern? (1 marks)

1. Double ups
2. 
3. Head and shoulders
4. 
5. Triangles
6. 
7. Resistance and support
8. 

Q8. Primary trend in Dow Theory is known as __________. (1 marks)

1. Wave
2. 
3. Triangle
4. 
5. Tide
6. 
7. Rounded bottom
8. 

Q9. The primary purpose of the liquidity ratios is to determine: (1 marks)

1. The amount of earnings paid to shareholders
2. The amount of working capital tied up in inventory
3. The ability of a firm to pay off short-term obligations
4. The relative level of short-term debt

Correct answer: The ability of a firm to pay off short-term obligations

Q10. Which of the following statement is TRUE regarding earning per share? (1 marks)

1. It represents the company’s current obligation
2. It represents the ability of a company to repay its current liabilities
3. It represents per share profit available for distribution to the shareholders
4. It represents the percentage of earnings paid to shareholders

Correct answer: It represents per share profit available for distribution to the shareholders

Q11. Which of the following industries is LEAST sensitive to changes in the business cycle? (1 marks)

1. Manufactures of business plant and equipment
2. Machine tools and special equipment, such as for pollution control
3. Industries specializing in high technology
4. A refrigerators manufacturing company

Correct answer: Machine tools and special equipment, such as for pollution control

Q12. Which of the following industry tend to be composed of relatively volatile and risky stocks? (1 marks)

1. Defensive industries
2. Interest sensitive industries
3. Growth industries
4. Cyclical industries

Correct answer: Interest sensitive industries

Q13. Which of the following is defined as an unmanaged, fixed-income security portfolio put together by a sponsor and handled by an independent trustee? (1 marks)

1. Unit investment trust
2. Closed-end investment
3. Open-end investment
4. Money market fund

Correct answer: Unit investment trust