Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

BUS-440 > Quiz 2 > Flashcards

Quiz 2 Flashcards

1
Q 
2. The annual interest payment divided by the current price of a bond is called the:
A. Coupon rate
B. Current yield
C. Yield to maturity
D. Yield to market
E. Market yield
A

B. Current yield

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

A futures contract is an agreement:
A. That obligates a corporation to issue additional securities at a specified date in the future
B. To exchange financial assets on a specified date in the future with the price determined on that date
C. To deliver goods today in exchange for an agreed upon payment to be paid on a specified date in the future
D. To exchange a specified quantity of goods on a specified date in the future at the current market price
E. To exchange goods on a specified date in the future at a price that is agreed upon today.

A

E. To exchange goods on a specified date in the future at a price that is agreed upon today.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q
  1. A call option is an agreement that:
    A. Obligates both the buyer and seller to a future transaction
    B. Grants the seller the right to buy a security at a predetermined price
    C. Gives the buyer the right to purchase an asset at some point in the future
    D. Grants the seller the right but not the obligation to sell an asset
    E. Presets a price but not a time period.
A

C. Gives the buyer the right to purchase an asset at some point in the future

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q 
5. The amount of money per share that will be received when a put option on stock is exercised is called the \_\_\_\_\_\_\_\_\_ price.
A. Market
B. Stock
C. Strike
D. Future
E. Obligated
A

C. Strike

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q 
7. What was the closing price beta movers bond?
A. 1020.13
B. 1033.54
C. 1044.07
D. 1053.54
E. 1054.07
A

B. 1033.54

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q
  1. Which one of the following statements related to common stock is correct?
    A. Corporations are required to pay annual dividends to its common stockholders.
    B. Corporations have the right to discontinue paying dividends
    C. Corporations pay dividends at the discretion of the firm’s president
    D. Common stock is a form of corporate debt
    E. Common stock has a pre-defined liquidation value
A

B. Corporations have the right to discontinue paying dividends

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q 
9. Which one of the following is a derivative asset?
A. Common stock
B. Option contract
C. Government bond
D. Preferred stock
E. Corporate bond
A

B. Option contract

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q 
10. If you want the right, but not the obligation, to sell a stock at a specified price you should:
A. Buy a call
B. Sell a call
C. Buy a put
D. Sell a put
E. Either sell a call or buy a put
A

C.buy a put

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q 
11. You will earn a profit as the owner of a call option if the price of the underlying asset 
A. Decreases
B. Remains constant or decreases
C. Remains constant
D. Remains constant or increases
E. Increases
A

E. Increases

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q
  1. The seller of a naked call is betting that the price of the underlying asset will
    A. Decrease
    B. Increase
    C. Decrease and then increase prior to the expiration date
    D. Will remain constant for a period of time and then increase prior to the expiration date
    E. Have no effect on the value of the call
A

A. Decrease

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q 
13. A 7.5% coupon bond is currently quoted at 89.3 and has a face value of 1000.  What is the amount of each semi annual coupon payment if you own 3 of these bonds?
A. 56.25
B. 75.00
C. 100.46
D. 112.50
E. 200.93
A

D. 112.50

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q 
14. An investment company that will repurchase shares at any time is called a(n) \_\_\_\_\_\_\_ fund.
A. Hedge
B. Closed-end
C. Open-end
D. Public
E. Exchange traded
A

C. Open-end

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q 
15. The value of a loan mutual fund's assets less its liabilities, divided by the number of shares outstanding is referred to as the fund's
A. Net asset value
B. Offering price
C. Open end value
D. Closed end value
E. Prime Value
A

A. Net asset value

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q 
16. A fee that is charged at the time mutual fund shares are purchased by an investor is called a:
A. Contingent deferred sales charge
B. 12b-1 fee
c. Back end load
D. Front end load
E. Issuance charge
A

D. Front end load

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q
  1. Shares in closed end funds:
    A. Can be resold to the fund at any time
    B. Are more popular than shares in open end funds
    C. May sell for more or less than the NAV
    D. Are referred to as mutual fund shares
    E. Cannot be resold
A

C. May sell for more or less than the NAV

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q
  1. The income earned by a regulated investment company is:
    A. Exempt from all taxation
    B. Taxed only at the state and local level
    C. Taxed only at the federal level
    D. Taxable income for the fund
    E. Taxable income for the fund’s shareholders.
A

E. Taxable income for the fund’s shareholders

17
Q
  1. Small cap funds:
    A. Generally focus on dividend paying stocks
    B. Focus more on capital appreciation than on current income
    C. Are defined as the smallest 20% of funds with the smallest NAVs
    D. Are defined as the 20% of funds w/ the smallest NAVs
    E. Are generally also classified as equity income funds
A

B. Focus more on capital appreciation than on current income

18
Q
  1. A sector fund:
    A. Tends to perform consistently from one year to the next
    B. Is usually highly diversified
    C. Rarely outperforms other types of funds
    D. Concentrates on investing in one industry or one commodity
    E. Is best evaluated by its past performance
A

D. Concentrates on investing in one industry or one commodity

19
Q 
A fund which tracks the s & P 500 would best be classified as which type of fund?
A. Sector
B. Global
C. Equity income
D. Index
E. Growth
A

D. Index

20
Q 
22. A list of available option contracts and their prices for a particular security listed in order of strike price and maturity date is referred to as which of the following?
A. Value chain
B. Intrinsic list
C. Option chain
D. Strike list
E. Exercise price display
A

C. Option chain

21
Q 
23. An option that would not yield a positive payoff if exercised today is referred to by which one of the following terms?
A. Hollow option
B. Zero option
C. In the cellar option
D. Out of the money option
E. Strike out
A

D. Out of the money option

22
Q 
24. Which one of the following is equal to the option premium minus the intrinsic value?
A. Parity value
B. Payoff value
C. Time value
D. Strike value
E. Profit
A

C. Time value

23
Q 
25. Selling a call option on stock which you own is referred to as which one of the following strategies?
A. Covered call
B. Naked call
C. Protective put
D. Underlying put
E. Straddle
A

A. Covered call

24
Q 
26. You currently own 300 shares of Microsoft stock.  If you purchase options on this stock to protect against future declines in the price of the stock you are implementing which one of the following?
A. Covered call
B. Naked call
C. Protective put
D. Bear spread
E. Straddle
A

C. Protective put

25
Q 
27. Louise just purchased 3 call option contracts on GE stock.  How many shares of stock can she buy at the strike price based on these contracts?
A. 3
B. 30
C. 300
D. 30,000
E. 300,000
A

C.300

26
Q 
28 you are interested in reviewing the information corporations file with the SEC.  Which one of the following is the archive of these filings?
A. Samson
B. Reg Fd
C. Edgar
D. No public information files
E. ROA filings
A

C. Edgar

27
Q

29, regulation FD requires companies to do which one of the following when disclosing material non public information?
A. Advise the SEC 7 working days prior to such disclosure
B. Disclose the information without preference to any party or parties
C. Only disclose the information to professional analysts
D. Only disclose the information after a 7 day advance notice of an announcement
E. Disclose the information only after a 24 delay

A

B. Disclose the information without preference to any party or parties

28
Q 
30. Which one of the following provides information on a firm's assets and liabilities as of a particular date?
A. Cash flow statement
B. Pro for a income statement
C. Income statement
D. Tax return
E. Balance sheet
A

E. Balance sheet

29
Q 
31. Smith's corner market had annual sales of $425,300 and total assets of $366,000. What is the return on assets if the profit margin is 11%?
A. 8.2%
B. 9.8%
C. 10.6%
D. 11%
E. 12.8%
A

E. 12.8%

30
Q 
32. Bay Marina, Inc. Has net income of $53,700 and has 30000 shares of stock outstanding.  Similar firm's have a price earnings ratio of 20.  Given this, what should the market price of Bay Marina, Inc. Stock be per share.
A. $28.91
B. $29.29
C. $30.40
D. $33.91
E. $35.80
A

E. $35.80

31
Q

Which one of the following is the best definition of a money market instrument?
A. Corporate debt that matures in 90 days or less
B. Bank savings account
C. Investment issued by a financial institution that matures in 30 days or less
D. Investment issued by a financial institution that matures in one year or less
E. Debt issued by the government or a corporation that matures in one year or less

A

E. Debt issued by the government or a corporation that matures in one year or less

BUS-440 (5 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2024 Bold Learning Solutions. Terms and Conditions