Question 1

________ voting of common share gives minority shareholders the most representation on the board of directors.

Accepted Answer

A)  Majority
B)  Cumulative
C)  Rights
D)  ProxyE) A) and C)
F) A) and B)

Question 2

________ is not a money market instrument.

Accepted Answer

A)  A certificate of deposit
B)  A Treasury bill
C)  A Treasury bond
D)  Commercial paperE) None of the above
F) B) and D)

Question 3

If you thought prices of share would be rising over the next few months you may wish to ________ on the share.

Accepted Answer

A)  purchase a call option
B)  purchase a put option
C)  sell a futures contract
D)  place a short sale orderE) C) and D)
F) All of the above

Question 4

Which one of the following provides the best example of securitisation?

Accepted Answer

A)  convertible bond
B)  call option
C)  mortgage pass-through security
D)  preferred shareE) A) and B)
F) A) and C)

Question 5

Which of the following does not approximate the performance of a buy and hold portfolio strategy?

Accepted Answer

A)  An equally weighted index
B)  A price weighted index
C)  A value weighted index
D)  Weights are not a factor in this situationE) None of the above
F) A) and D)

Question 6

A tax free municipal bond provides a yield of 3.2%. What is the equivalent taxable yield on the bond given a 35% tax bracket?

Accepted Answer

A)  3.20%
B)  3.68%
C)  4.92%
D)  9.00%E) C) and D)
F) A) and D)

Question 7

Preferred share is like long-term debt in that ________.

Accepted Answer

A)  it gives the holder voting power regarding the firm's management
B)  it promises to pay to its holder a fixed stream of income each year
C)  the preferred dividend is a tax-deductible expense for the firm
D)  in the event of bankruptcy preferred share has equal status with debtE) A) and B)
F) A) and C)

Question 8

A ________ gives its holder the right to buy an asset for a specified exercise price on or before a specified expiration date.

Accepted Answer

A)  call option
B)  futures contract
C)  put option
D)  interest rate swapE) A) and C)
F) None of the above

Question 9

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the different exercise prices, the call option with the ________ exercise price and the put option with the ________ exercise price will have the greatest value.

Accepted Answer

A)  $40; $30
B)  $30; $40
C)  $35; $35
D)  $40; $40E) A) and B)
F) A) and C)

Question 10

Eurodollars are ________.

Accepted Answer

A)  dollar denominated deposits at any foreign bank or foreign branch of an American bank
B)  dollar denominated bonds issued by firms outside their home market
C)  currency issued by Euro Disney and traded in France
D)  dollars that wind up in banks as a result of money laundering activitiesE) A) and B)
F) A) and C)

Question 11

A ________ gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.

Accepted Answer

A)  call option
B)  futures contract
C)  put option
D)  interest rate swapE) A) and C)
F) C) and D)

Question 12

Which of the following provides an important source of funding for the Australian Commonwealth Government?

Accepted Answer

A)  Certificate of deposit
B)  Treasury notes
C)  Eurodollar deposits
D)  Commercial paperE) All of the above
F) B) and D)

Question 13

What is the tax exempt equivalent yield on a 9% bond yield given a marginal tax rate of 28%?

Accepted Answer

A)  6.48%
B)  7.25%
C)  8.02%
D)  9.00%E) B) and D)
F) None of the above

Question 14

Which of the following are true statements about T-notes?
I. T-notes are typically issued in denominations of $1 000 000
II. Income earned on T-notes is exempt from all taxes
III. T-notes are issued at a discount

Accepted Answer

A)  I only
B)  I and II only
C)  I and III only
D)  I, II and IIIE) B) and D)
F) None of the above

Question 15

An investor in a T-note earns interest by ________.

Accepted Answer

A)  receiving interest payments every 90 days
B)  receiving dividend payments every 30 days
C)  converting the T-note at maturity into a higher valued government bond
D)  buying the note at a discount from the face value received at maturityE) A) and B)
F) None of the above

Question 16

Which of the following is not considered a money market investment?

Accepted Answer

A)  Bankers' acceptances
B)  Treasury notes
C)  Repurchase agreements
D)  EurobondsE) B) and C)
F) A) and B)

Question 17

Treasury notes are offered for sale generally on a ________ basis.

Accepted Answer

A)  daily
B)  weekly
C)  monthly
D)  quarterlyE) A) and B)
F) None of the above

Question 18

The most actively traded money market security is

Accepted Answer

A)  Treasury notes
B)  Bankers' Acceptances
C)  Certificates of Deposit
D)  Common sharesE) A) and C)
F) B) and C)

Question 19

________ is considered to be an emerging market country.

Accepted Answer

A)  France
B)  Norway
C)  Brazil
D)  CanadaE) A) and D)
F) A) and C)

Exam 2: Asset Classes and Financial Instruments

A ________ gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.

Correct Answer
verified

A tax free municipal bond provides a yield of 3.2%. What is the equivalent taxable yield on the bond given a 35% tax bracket?

Correct Answer
verified

The most actively traded money market security is

Correct Answer
verified

If you thought prices of share would be rising over the next few months you may wish to ________ on the share.

Correct Answer
verified

What is the tax exempt equivalent yield on a 9% bond yield given a marginal tax rate of 28%?

Correct Answer
verified

Which of the following provides an important source of funding for the Australian Commonwealth Government?

Correct Answer
verified

________ is considered to be an emerging market country.

Correct Answer
verified

Which of the following does not approximate the performance of a buy and hold portfolio strategy?

Correct Answer
verified

Which one of the following provides the best example of securitisation?

Correct Answer
verified

________ voting of common share gives minority shareholders the most representation on the board of directors.

Correct Answer
verified

A ________ gives its holder the right to buy an asset for a specified exercise price on or before a specified expiration date.

Correct Answer
verified

Which of the following is not considered a money market investment?

Correct Answer
verified

An investor in a T-note earns interest by ________.

Correct Answer
verified

Preferred share is like long-term debt in that ________.

Correct Answer
verified

Which of the following are true statements about T-notes? I. T-notes are typically issued in denominations of $1 000 000 II. Income earned on T-notes is exempt from all taxes III. T-notes are issued at a discount

Correct Answer
verified

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the different exercise prices, the call option with the exercise price and the put option with the exercise price will have the greatest value.

Correct Answer
verified

Treasury notes are offered for sale generally on a ________ basis.

Correct Answer
verified

________ is not a money market instrument.

Correct Answer
verified

Eurodollars are ________.

Correct Answer
verified

Exam 2: Asset Classes and Financial Instruments

A ________ gives its holder the right to sell an asset for a specified exercise price on or before a specified expiration date.

Correct AnswerverifiedShow Answer

A tax free municipal bond provides a yield of 3.2%. What is the equivalent taxable yield on the bond given a 35% tax bracket?

Correct AnswerverifiedShow Answer

The most actively traded money market security is

Correct AnswerverifiedShow Answer

If you thought prices of share would be rising over the next few months you may wish to ________ on the share.

Correct AnswerverifiedShow Answer

What is the tax exempt equivalent yield on a 9% bond yield given a marginal tax rate of 28%?

Correct AnswerverifiedShow Answer

Which of the following provides an important source of funding for the Australian Commonwealth Government?

Correct AnswerverifiedShow Answer

________ is considered to be an emerging market country.

Correct AnswerverifiedShow Answer

Which of the following does not approximate the performance of a buy and hold portfolio strategy?

Correct AnswerverifiedShow Answer

Which one of the following provides the best example of securitisation?

Correct AnswerverifiedShow Answer

________ voting of common share gives minority shareholders the most representation on the board of directors.

Correct AnswerverifiedShow Answer

A ________ gives its holder the right to buy an asset for a specified exercise price on or before a specified expiration date.

Correct AnswerverifiedShow Answer

Which of the following is not considered a money market investment?

Correct AnswerverifiedShow Answer

An investor in a T-note earns interest by ________.

Correct AnswerverifiedShow Answer

Preferred share is like long-term debt in that ________.

Correct AnswerverifiedShow Answer

Which of the following are true statements about T-notes? I. T-notes are typically issued in denominations of $1 000 000 II. Income earned on T-notes is exempt from all taxes III. T-notes are issued at a discount

Correct AnswerverifiedShow Answer

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the different exercise prices, the call option with the ________ exercise price and the put option with the ________ exercise price will have the greatest value.

Correct AnswerverifiedShow Answer

Treasury notes are offered for sale generally on a ________ basis.

Correct AnswerverifiedShow Answer

________ is not a money market instrument.

Correct AnswerverifiedShow Answer

Eurodollars are ________.

Correct AnswerverifiedShow Answer

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verified

June call and put options on King Books Inc are available with exercise prices of $30, $35 and $40. Among the different exercise prices, the call option with the exercise price and the put option with the exercise price will have the greatest value.

Correct Answer
verified

Correct Answer
verified

Correct Answer
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Correct Answer
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