Exam (elaborations)
Test 3 Fin 4305
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Exam of 18 pages for the course Fin 4305 at Fin 4305 (Test 3 Fin 4305)
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George purchased a futures contract at 289. The contract is on 2500 units, requires a 10percent margin deposit and is priced in cents per unit. George sold the contract at 278.
What was George's return on invested capital?
a +40 b -38 c -40 d +38
. . .
percent percent percent percent
.
(Selling Price Purchase Price)/ (Purchase Price * Margin %)
The buyer of an option has which of the following rights? I. the right to exercise the
option prior to maturity II. the right to change the strike price III. the right to resell the
option IV. the right to let the option expire unexercised
a III and IV
.
only
b I, II, III and IV
.
c I, III and IV
.
only
d I and III only
.
One type of mutual fund spreads investors' money across equity markets, bond markets,
and money markets. Moreover, as market conditions change, the amount of money
invested in each market sector will change. This type of mutual fund is known as a(n)
a growth- b fiscally c asset d socially
. .
and-income responsible allocation responsible
fund. fund.
. .
fund. fund.
A year ago, the Pacific Rim Specialty Fund, a closedend mutual fund, was trading at
$67.00, when its NAV was $65.00. Today, the fund is quoted at a price of $74.00 while
its NAV stands at $79.99. If the fund paid $1.04 to shareholders over the past year, what
is the holding period return (based on share price) on Pacific Rim?
a 15.4 b 19.5 c 23.1 d 12.0
. .
percent percent percent percent
. .
Which of the following characteristics apply to closed end mutual funds?.. I. There is no
limit on the number of outstanding shares.. II. Trades are transactions between
shareholders.. III. Shares may sell at a premium or a discount.. IV. The fund will
repurchase investors' shares at any time.
This study source was downloaded by 100000848900824 from CourseHero.com on 09-29-2022 13:33:48 GMT -05:00
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, a II, III and IV
.
only
b II and III only
.
This study source was downloaded by 100000848900824 from CourseHero.com on 09-29-2022 13:33:48 GMT -05:00
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, c I, II and III
.
only
d I and IV only.
.
Which one of the following would be the LEAST liquid investment?
a stoc b Series c money market mutual d real
EE
. k bond . fund estate
. .
Which one of the following statements concerning interest rates is correct?
a Economic b Rising c A decrease d A federal
. .
expansions interest rates in the budget
in foreign surplus
. countries will . will cause
will cause cause U.S. money interest
interest rates interest rates supply will rates to
to decline. to decline. cause decline.
interest
rates to
decline.
an increase in the government budget surplus or a decrease in its budget deficit
A manager of a portfolio of bonds believes that interest rates are about to increase. Which
of the following strategies for the portfolio would be optimal?
a Sell the b Sell the c Sell the d Sell the longest
.
shorter shortest longer duration bonds
. . and buy those
. duration bonds duration with even
duration and buy those bonds and longer duration.
bonds and buy with even buy those of
those of shorter shorter
longer duration. duration.
duration.
The value of an interestrate futures contract will go up when
a interest b interest c the Dow Jones d theDow Jones
. .
rates go rates go Industrial Industrial
down. Average (DJIA)
. . goes up.
up. Average (DJIA)
goes down.
Short interest
This study source was downloaded by 100000848900824 from CourseHero.com on 09-29-2022 13:33:48 GMT -05:00
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