FIN 351 DeVry Complete Quiz Package

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FIN 351 DeVry Complete Quiz Package

FIN351

FIN 351 DeVry Complete Quiz Package

 

FIN 351 DeVry Week 1 Quiz Latest

  1. (TCO 1)When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows:
  • Large stocks, small stocks, long-term corporate bonds, long-term government bonds, and treasury bills.
  • Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks
  • Large stocks, small stocks, long-term government bonds, long-term corporate bonds, and treasury bills.
  • Small stocks, large stocks, long-term corporate bonds, long-term government bonds, and treasury bills.

Question 2. Question : (TCO 1) A direct equity claim arises through investment in _____.

  • bonds and other debt instruments
  • common stocks, warrants, and options
  • preferred stock and commodity futures
  • mutual funds

Question 3. Question : (TCO 1) What factors must be considered in choosing between investment alternatives?

  • Risk and liquidity
  • Interest or dividends versus capital gains
  • Timeframe for managing funds and evaluating performance and tax effects
  • All of the above

Question 4. Question : (TCO 1) Which of the following is NOT a characteristic of an organized exchange?

  • An organized exchange functions as a primary market.
  • Securities are bought and sold in an auction market by brokers acting as agents for buyers and sellers in a central location.
  • An organized exchange may be either national or regional.
  • An organized exchange has a central location where all trading takes place.

Question 5. Question : (TCO 1) Secondary markets provide _____.

  • efficiency
  • continuity
  • competition
  • All of the above

Question 6. Question : (TCO 1) The process of selling a new issue of securities so that the price is guaranteed to the selling firm is referred to as _____.

  • underwriting
  • best efforts
  • direct by issuer
  • shelf registration

Question 7. Question : (TCO 1) The first exchange to become a publicly traded company was the _____.

  • New York Stock Exchange
  • Chicago Board of Trade
  • NASDAQ Stock Market
  • Chicago Mercantile Exchange

Question 8. Question : (TCO 1) The _____ is the tax rate that applies to each new dollar of income.

  • average tax rate
  • short-term capital gains tax rate
  • long-term capital gains tax rate
  • marginal tax rate

Question 9. Question : (TCO 1) The index which gives equal weight to every company included, and is therefore not dominated by any single company, is the _____.

  • Dow Jones Composite Average
  • Standard & Poor’s 400 Index
  • Value Line Average
  • American Stock Exchange Index

Question 10. Question : (TCO 1) The success of a short investment position depends on _____.

  • a level stock price
  • a declining stock market
  • an increasing stock price
  • declining interest rates

 

 

FIN 351 DeVry Week 2 Quiz Latest

  1. (TCO 2)The primary purpose of fundamental stock valuation is to _____.
  • eliminate stocks of those companies that are potential losers from the portfolio
  • identify for purchase those companies that are fundamentally undervalued
  • learn to identify peaks and troughs of the business cycle
  • All of the above

Question 2. Question : (TCO 2) Some of the major leading indicators would be _____.

  • money supply (M2), consumer expectations, and stock prices (S&P 500)
  • personal income, employees on nonagricultural payrolls, and industrial production
  • average prime rate charged by banks, labor cost per unit of output, and commercial and industrial loans outstanding
  • All of the above

Question 3. Question : (TCO 2) In which stage of the industry life cycle are companies likely to be privately owned?

  • Development
  • Maturity
  • Decline
  • Expansion

Question 4. Question : (TCO 2) The crossover point on the life cycle curve is the point where _____.

  • the company issues stock in an initial public offering (IPO)
  • the company gets listed on an organized exchange
  • the company’s industry moves from the growth stage to the expansion stage
  • the industry’s products begin to be accepted by the marketplace

Question 5. Question : (TCO 2) Which of the following statements about stock valuation based on asset value is NOT true?

  • Natural resources often give a company value, even if an income stream is not produced.
  • The value of the assets may not even appear on the balance sheet.
  • Current assets are usually excluded from the valuation process, since they will be used up in the next business cycle.
  • Hidden assets can add substantial value to the firm.

Question 6. Question : (TCO 2) The primary difference between dividend valuation models and earnings valuation models is _____.

  • selecting the appropriate discount rate
  • dividends are not considered in earnings models
  • whether the investor’s income stream or the firm’s income stream is measured
  • More than one of the above

Question 7. Question : (TCO 2) P/E ratios are influenced by a company’s _____.

  • growth rate
  • risk
  • capital structure
  • All of the above

Question 8. Question : (TCO 2) The major device for measuring the profitability of a firm over a defined period of time is the _____.

  • income statement
  • balance sheet
  • statement of cash flows
  • None of the above

Question 9. Question : (TCO 2) Asset-utilization ratios measure _____.

  • productivity of fixed assets in terms of sales.
  • the relationship of sales on the income statement to various assets on the balance sheet.
  • the firm’s ability to pay off short-term obligations as they come due.
  • All of the above

Question 10. Question : (TCO 2) _____ ratios measure the impact of external market forces on the internal performance of a firm.

  • Price
  • Profitability
  • Liquidity
  • Asset-utilization

 

 

FIN 351 DeVry Week 3 Quiz Latest

  1. (TCO 3)When viewing the terms “special returns” or “abnormal returns,” we know this can refer to _____.
  • the Efficient Market Hypothesis
  • gains in excess of the market risk-adjusted average
  • convertibles and warrants, etc.
  • More than one of the above

Question 2. Question : (TCO 3) Legal methods for attempting to profit through mergers and acquisitions include all of the following, except identifying _____.

  • an insider close to the information
  • candidates through financial or operating characteristics
  • securities which are undergoing unusual volume or pricing patterns
  • industries where companies are being absorbed

Question 3. Question : (TCO 3) An acquisition may be canceled because of any of the following except _____.

  • antitrust action
  • an unusually high premium on stock price
  • a lawsuit brought by stockholders
  • disapproval of the target company’s management

Question 4. Question : (TCO 3) New stock issues are considered a special investment situation, because _____.

  • they exhibit a very good long-term investment potential
  • the spread is greater than that in the secondary market
  • there is some evidence that new issues are underpriced
  • More than one of the above

Question 5. Question : (TCO 3) Research on the strong form shows that _____ are able to achieve superior returns.

  • members of the SEC
  • corporate insiders and public officials
  • market specialists and corporate insiders
  • the majority of professional mutual fund managers

Question 6. Question : (TCO 3) According to the Dow Theory, daily fluctuations and secondary movements in the market are used to help identify _____.

  • a key indicator
  • a primary trend
  • shifts in demand and supply
  • More than one of the above

Question 7. Question : (TCO 3) All of the following are smart money rules except ¬_____.

  • investment advisory recommendations
  • short sales by specialists
  • Barron’s Confidence Index
  • None of the above

Question 8. Question : (TCO 3) A low Barron’s Confidence Index means that _____.

  • investors prefer stocks to bonds
  • the yield on bonds is greater than that on stock
  • low-quality bonds have returns much higher than high-quality bonds
  • low-quality bonds have returns slightly higher than high-quality bonds

Question 9. Question : (TCO 3) The problem in reading charts has always been _____.

  • with the errors that are frequently made in the graphing process
  • understanding the past market movements
  • in analyzing the patterns in such a fashion that they truly predict stock market movements before they unfold
  • None of the above

Question 10. Question : (TCO 3) Smart money rules or approaches to the market include _____.

  • short sales by specialists
  • the put-call ratio
  • investment advisory recommendations
  • the odd-lot theory

 

 

FIN 351 DeVry Week 4 Quiz Latest

  1. (TCO 4)The most important feature of municipal bonds is _____.
  • the wide range of denominations and maturities
  • that the interest is not taxable by the federal government
  • the risk-free nature of this investment
  • its appeal to investors needing growth

Question 2. Question : (TCO 4) For the major bond-rating agencies, the lowest level of an investment grade bond is _____.

  • AA (investment grade includes AAA and AA)
  • A (investment grade includes AAA, AA, and A)
  • BBB (investment grade includes AAA, AA, A, and BBB)
  • B (investment grade includes AAA, AA, A, BBB, BB, and B)

Question 3. Question : (TCO 4) A corporate bond quoted at 108.25 is selling for _____.

  • $108.25
  • $1,082.50
  • $10,825
  • None of the above

Question 4. Question : (TCO 4) Assume a $1,000 treasury bill is quoted to pay 7% interest over a three-month period. What will be the price of the treasury bill?

  • $982.50
  • $980
  • $970
  • $980.50

Question 5. Question : (TCO 4) When should an investor calculate both yield to maturity and yield to call?

  • An investor should calculate both yield to maturity and yield to call whenever there is a call provision.
  • An investor should calculate both yield to maturity and yield to call when the sum of the present values of the interest payments exceeds the call price.
  • An investor should calculate both yield to maturity and yield to call when the market price is greater than or equal to the call price.
  • An investor should calculate both yield to maturity and yield to call whenever the funds can be reinvested.

Question 6. Question : (TCO 4) What will happen to the market value of a bond if interest rates increase?

  • The market value will decrease.
  • The market value will increase.
  • The market value will increase or decrease, depending on the general economic climate.
  • The market value should remain level.

Question 7. Question : (TCO 4) Short-term interest rates have _____ volatility in comparison to long-term interest rates.

  • much less
  • more
  • equal
  • slightly less

Question 8. Question : (TCO 4) The duration of a bond is determined by a combination of the maturity date and value, and _____.

  • the pattern of coupon payments
  • the call premium
  • the put premium
  • None of the above

Question 9. Question : (TCO 4) Factors which influence the relationship between duration and maturity include all of the following EXCEPT _____.

  • the face value of the bond
  • the coupon rate of the bond
  • the number of years to maturity
  • None of the above

Question 10. Question : (TCO 4) The duration on an 8%, 25-year bond is _____ the duration on a 9%, 30-year bond.

  • greater than
  • less than
  • equal to
  • There is not enough information to tell

 

 

FIN 351 DeVry Week 5 Quiz Latest

  1. (TCO 5)When is the best time to convert a convertible bond to common stock?
  • The best time to convert is when the call price exceeds the conversion value.
  • The best time to convert is after the conversion ratio decreases.
  • The best time to convert is when the conversion value is below the pure bond value.
  • None of the above

Question 2. Question : (TCO 5) Which is the conversion ratio of a $1,000 bond convertible at $25.50 per share? The coupon rate is 10% and the market rate 12%. This company’s common stock is currently trading at $22 per share.

  • 45.45 shares
  • 39.22 shares
  • 80 shares
  • 21.1 shares

Question 3. Question : (TCO 5) A put is said to be “in-the-money” when the strike price is _____ the market price.

  • equal to
  • greater than
  • less than

Question 4. Question : (TCO 5) A major disadvantage of using call options to hedge a short position is that _____.

  • hedging increases the risk of loss on the short sale.
  • the option premium and commission reduce profit potential.
  • the price of the stock may go up
  • None of the above

Question 5. Question : (TCO 5) A straddle is a combination of a put and call on _____.

  • the same stock, with the same strike price and expiration date.
  • different stocks, with the same strike price and expiration date.
  • different stocks, with different strike price and expirations dates.
  • the same stock, with the same the strike price and different expiration dates.

Question 6. Question : (TCO 5) An agreement which provides for the delivery of a given amount of something at a given time in the future, at a given price is called a(n) _____contract.

  • futures
  • seasonal
  • options
  • None of the above

Question 7. Question : (TCO 5) The primary difference between options and futures is that _____.

  • the option premium is the full liability of the purchaser, while a futures contract may call for additional margin to hold the position
  • options are more speculative than futures
  • futures require the physical transfer of goods, while options do not
  • More than one of the above

Question 8. Question : (TCO 5) The value of a stock index futures contract is the product of _____ and the appropriate multiplier.

  • the settle price
  • the change in the settle price
  • the difference between the settle price and the change
  • None of the above

Question 9. Question : (TCO 5) Which of the following statements about hedging a stock portfolio with stock index futures is NOT true?

  • Futures contracts magnify gains (or losses) on the stock portfolio.
  • In a declining market, futures contracts help offset losses on the portfolio.
  • A risk-taker would probably not hedge the entire portfolio with stock index futures.
  • None of the above

Question 10. Question : (TCO 5) The settle price shown in a stock index futures table is the _____.

  • highest price the contract hit during the day
  • closing price for the contract at the end of the day
  • price for the contract only for the last day of the contract
  • None of the above

 

 

FIN 351 DeVry Week 7 Quiz Latest

Question 1. Question : (TCO 7) According to the text, a risk-averse investor _____.

  • demands a premium for assuming risk
  • will only participate in low-risk or risk-free investments
  • is one of a small minority in the United States
  • More than one of the above

Question 2. Question : (TCO 7) Under Markowitz’s theory, the ideal portfolio for an investor is represented by _____.

  • the point of tangency between the efficient frontier and the investor’s indifference curve
  • the highest possible indifference curve
  • the highest possible point on the efficient frontier
  • None of the above

Question 3. Question : (TCO 7) Systematic risk is rewarded with a premium in the marketplace because _____.

  • risk is particular to the stock or industry
  • it represents a random occurrence which could not have been foreseen
  • it is associated with market movements that cannot be eliminated through diversification
  • None of the above

Question 4. Question : (TCO 7) Which of the following are assumptions of the capital asset pricing model?

  • Funds can be borrowed or lent in unlimited quantities at a risk-free rate.
  • The objective of all investors is to maximize their expected utility over the same one-period timeframe, using the same basis for evaluating investments.
  • There are no taxes or transaction costs associated with any investment.
  • All of the above

Question 5. Question : (TCO 7) A good way to minimize risk and receive an optimum return on your portfolio is _____.

  • through diversification
  • to buy only risk-free securities
  • through blue-chip stock purchases only
  • through junk-bonds

Question 6. Question : (TCO 7) Assume a portfolio has the possibility of returning 3%, 6%, 11%, or 16%, with the likelihood of 20%, 30%, 25%, and 25%, respectively. The expected value of the portfolio is _____.

  • 8.75%
  • 9.0%
  • 9.15%
  • 9.51%

Question 7. Question : (TCO 7) If the market rate of return is 10% and the beta on a particular stock is 1.00, the return on the stock will be _____.

  • greater than 10%
  • 10%
  • less than 10%
  • dependent on some other factor

Question 8. Question : (TCO 7) For two investments with a correlation coefficient (rij) greater than +1, the portfolio standard deviation will be _____ the weighted average of the individual investments’ standard deviation.

  • more than
  • less than
  • equal to
  • zero compared to

Question 9. Question : (TCO 7) The capital asset pricing model (CAPM) takes off where the _____ concluded.

  • market line
  • capital market line
  • efficient frontier and Markowitz portfolio theory
  • arbitrage pricing theory

Question 10. Question : (TCO 7) Using the formula for the security market line (Formula 21-7), if the risk-free rate (RF) is 6%, the market rate of return (KM) is 12%, and the beta (bi) is 1.2, compute the anticipated return for stock i (Ki).

  • 20.4%
  • 16.33%
  • 13.64%
  • 13.2%