fin630 quiz 2 fall 2011 solved by affaq

7/29/2019 FIN630 Quiz 2 Fall 2011 Solved by Affaq

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FIN630 - Investment Analysis & Portfolio Management

Quiz # 02

Solved by afaaq

[email protected]

Question # 1 of 20 ( Start time: 01:37:32 PM ) Total Marks: 1

Which of the following is the ratio of share price to stockholder equity

as measured on the balance sheet?Select correct option:

Price to book value ratio

Price to sales ratio

Leverage ratio

Debt coverage ratio


Which of the following trading systems is used by the Karachi Stock

Exchange?

Select correct option:

ISECTS

LOTS

KATSPETS


2/18


The S&P 500 Composite Stock Index is favored by most institutional

investors and money managers. What does S&P stands for?

Select correct option:Sophisticated and Poised

Standard and Poor

Stylish and Permanent

Sojourn and Perennial

Question # 4 of 20 ( Start time: 01:40:48 PM ) Total Marks: 1More investors are using technical analysis now than in earlier periods

because:


Investors are able to know the quantitative calculations of technical

analysis

More business schools are now teaching technical analysis

The Internet makes more data available to track stock pricesThere is now more empirical evidence supporting technical analysis


Which of the following represents an unusually risky stock?


Blue chip stockGrowth stock

Penny stock

None of the given options


3/18


The industries that are least affected by recessions and economic

adversity are referred as which of the following?


Growth industries

Cyclical industries

Interest-sensitive industries

Defensive industries


Which of the following depicts a bullish trend in stock market?


Stock price drop below support level

Stock price rises above support level

Stock price drop below resistant level

None of given options


In bottom-up approach of fundamental analysis, investors begin their

analysis with:

Select correct option:Industry

Economy

Market

Company


4/18


In which of the following charts days do not matter?


Line and pie charts

Bar and pie charts

Bar and line charts

Point and figure charts


In which of the following the investors look at the historical

perspective?


Value investment

Interactive investment

Growth investment

Accredited investment


Which one of the following is correct formula for calculating gross

margin?

Select correct option:Net Profit/Net Sales

Gross Profit/Net Sales

Net income/Net Sales

Gross Profit/credit Sales


5/18


The circuit breaker that is applied where stock prices in the market

are dropping is known as which of the following?


Starter

Floor

Ceiling

Simulator


On Balance Volume one of technical indicator use _____ as base.


Demand

Supply

Volume

Price


In which of the following accounts the trading charges are high?


Savings account

System account

Personal accountCash account


6/18


Which of the following terms refer to the recurring and fluctuating

levels of economic activity that an economy experiences over a long

period of time?Select correct option:

Claims cycle

Reaction cycle

Business cycle

Capital cycle


Which one of the following is correct formula for calculating operating

margin?


Net Profit/Net Sales


Operating income/Net SalesOperating income/credit sales


_____ do not change the collective wealth of shareholders.


Stock splitsBonus shares

Right shares

All of the following


7/18


Which of the following is the reason stock prices behave the way they

do at resistance lines?


Many investors want to buy at this price

Market makers resist moving prices lower than this price

Many investors want to sell at this price

Market makers support prices at this level

Question # 20 of 20 ( Start time: 01:49:48 PM ) Total Marks: 1Which of the following ratios are of more concern for the

shareholders?


Liquidity and profitability

Liquidity and leverage

Profitability and activity

Profitability and leverage


More investors are using technical analysis now than in earlier periods

because:


Investors are able to know the quantitative calculations of technical

analysis


8/18

More business schools are now teaching technical analysis

The Internet makes more data available to track stock prices

There is now more empirical evidence supporting technical analysis


Which of the following statements hold TRUE for ask price?


It is the price at which a broker is willing to sell a certain security

It is the price at which a broker is willing to buy a certain security

It is the quoted price in an order to buy shares of a company

It is the rate at which a dealer will buy the base currency


All of the following are characteristics of stop orders EXCEPT:


Protecting profits

Minimizing losses


9/18

Rapid execution

It is seldom used by investors


All of the following are the problems associated to the Dividend

Discount Model, EXCEPT:


This model need infinite stream of dividends

This model has uncertain dividend stream

This model must estimate future dividends

This model requires constant earnings per share


Which of the following depicts a bullish trend in stock market?


Stock price drop below support level

Stock price rises above support level

Stock price drop below resistant level


10/18

None of given options


An account that permits an investor to borrow part of the cost of

investment firm a brokerage firm.


Dealer accountOption account

Margin account

Cash account


Which order will be executed automatically at the current bid or ask

price?


Limit order

Market order

Stop order

Good till cancelled


11/18


In which of the following charts days do not matter?


Line and pie charts

Bar and pie charts

Bar and line charts

Point and figure charts


Long tern directs in Dow Theory is depicted through:


Holes

Strings

Waves


12/18

Tides


Which of the following is the ratio of a companys total market value

(price times number of shares) divided by sales?


Price to sales ratioPrice to book value ratio

Debt coverage ratio

Leverage ratio


Which of the following charts give the economic information on weekly

or yearly basis?


Line charts

Bar charts

Pie charts

Symbol charts


13/18


Companies that have capitalization amounts of more than $2 billion areknown as ___________.


Small cap companies

Mid cap companiesGrowth companies

Large cap companies


Which one of the following is correct formula for calculating operatingmargin?


Net Profit/Net Sales


Operating income/Net Sales

Operating income/credit sales


14/18


Which of the following take place at the expansion stage of theindustry life cycle?


Firm operations get more stable and dependable

No rapid growth in demandCosts get stable rather than decreasing or increasing

Sales growth decline as new products are developed


An investor wants to buy 100 shares of a company but due to shortageof funds investor can only 30% of the total share price and will borrow

rest of 70% from brokerage firm. Which of the following type of

account will be suitable for investor in this situation?


Cash account

Margin account


15/18

Real account

CFA account


Which of the following does not pay fix income (interest/ dividend) to

investors?Select correct option:

Preferred stock

Government bond

Common stock

Treasury bond


Which of the following is the theories searching the patterns in

randomness?



16/18

Elliott wave theory

Chaos theory

Portfolio theory

Valuation theory


Which of the following is not a type of the multistage dividenddiscount model?


Two-stage models

Y models

H models

Three-stage models


17/18


Which of the following is a characteristic of cyclical stock?


Their value is tied with the overall state of the national economy.

They are low-priced, speculative and risky securities.

They have stable earnings and no extensive liabilities

None of the given options


Which of the following programs propagate the ethics?


London Instruments Fiscal Attachment

Laurel Immigration Fairness Analysis

Low Income Financial Association

Licensed International Financial Analyst

FIN630 - Investment Analysis & Portfolio Management

Quiz # 02


18/18

Solved by afaaq

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fin630 quiz 2 fall 2011 solved by affaq

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