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Exam (elaborations)

WMD 5 Questions and Answers

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WMD 5 Questions and Answers GARP (Growth at a Reasonable Price). An investor has been reading about different equity stock selection investment approaches and has asked you whether there is an approach that reconciles the contradictions of value investing and growth investing. What approach will ...

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  • August 20, 2024
  • 7
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • GARP
  • GARP
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WMD 5 Questions and Answers
GARP (Growth at a Reasonable Price). - answer An investor has been reading about
different equity stock selection investment approaches and has asked you whether
there is an approach that reconciles the contradictions of value investing and growth
investing. What approach will you discuss with them?
A - Momentum investing.

B - GARP (Growth at a Reasonable Price).

C - Sector rotation.

D - Long/short strategies.

Thematic equities. - answer Equity shares in companies that sell products and
services that tackle a particular environmental or social challenge would be best
classified as a which of the following?
A - Thematic equities.

B - Improving ESG equities.

C - ESG engagement equities.

D - ESG leader equities.

A bond will definitely have a higher duration if it has lower coupons and is longer dated
on a lower yield.. - answer You are discussing the properties of Macaulay duration in
the context of bonds and bond portfolios. Which of the following statements regarding
this measure is INCORRECT?
A - A bond will definitely have a higher duration if it has lower coupons and is shorter
dated on a higher yield.

B - A dond will definitely have a higher duration if it has lower coupons and is longer
dated on a higher yield..

C - A bond will definitely have a higher duration if it has higher coupons and is longer
dated on a higher yield..

D - A bond will definitely have a higher duration if it has lower coupons and is longer
dated on a lower yield..

The holders of cumulative preferred stock. - answer A company has had a poor
recent trading performance and has decided that there are insufficient profits to pay

, dividends to shareholders this year. Assuming the company's profits recover next year,
who will ultimately get paid the dividends for this year?
A - The holders of callable preferred stock.

B - The holders of participating preferred stock.

C - The holders of redeemable preferred stock.

D - The holders of cumulative preferred stock.

The board of directors determine whether the company should pay either an ordinary
dividend or a preference dividend. - answer A client is seeking some information
from you regarding the different rights that are held by ordinary shareholders and
preference shareholders. In this context, which of the following statements is true?
A - The board of directors determine whether the company should pay either an
ordinary dividend or a preference dividend.

B - Both ordinary and preference shareholders are entitled to vote at general
shareholder meetings.

C - Where pre-emption rights apply, a company can issue ordinary shares to the public
without firstly offering them to the current shareholders, but cannot issue preference
shares.

D - Ordinary share dividends must be paid in priority to preference share dividends.

Contraction. - answer The Chief Investment Office recently recommended being
overweight in government bonds and significantly underweight in equities. Where does
this view place us in the economic cycle?
A - Contraction.

B - Recovery.

C - Expansion.

D - Slowdown.

A disruption to normal market operations through a lack of liquidity. - answer A client
has asked you to explain the meaning of market dislocations in relation to the securities
and products offered by your bank. Market dislocations have a number of typical
features, but there is a single defining characteristic. Which of the following is that single
unique defining characteristic?
A - A sudden increase in market volatility.

B - A movement in the asset price away from its fair value.

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