1. A stock’s beta value in statistical term is: a. its measure of diversifiable

ID: 2799160 • Letter: 1

Question

1. A stock’s beta value in statistical term is:

a. its measure of diversifiable risk.

b. The vitality of the asset in relation to the market.

c. Its measure of acceptable risk in relation to the risk- free rate.

d. Its measure of marketability with regard to earnings per share.

2. value stocks feature:

a. Rapid historical EPS growth

b. Rapid expected EPS growth

c. Above average P/E ratios.

d. Below average P/B ratios

3. Value investing always involves:

a. Focusing only on securities considered to be temporarily overvalued or popular for various reasons.

b. Seeking bargain described in terms of a market price that is below the economic value of assets in place

c.Focusing on companies expected to have above average rates of the growth in earnings and dividends.

d. Finding bargains selling at prices below their actual market price.

4. feature of a well-functioning investment industry that gives investors the ability to quickly buy and sell a significant amount of an investment without having a material impact on the price is described as :

a. Liquidity

b. Competitive markets

c. Risk transfer

5.Which of the following securities trade in the money market?

T-bills

Commercial paper

Bankers acceptances

All are correct

The best financial statement used to find information about the company owns and owes others is called the :

Income statement

Balance sheet

Cash flow statement

7.if a company is liquidated, proceeds from asset sales are distributed to common shareholders:

A) before unsecured debt investor and preferred shareholder claims are paid

B) after secured debt investor and preferred shareholder claims are paid

C) after preferred shareholder claims are paid but before unsecured debt investor claims are paid.

8. which of the following is a direct investment?

a) a private investment trusts.

b) a mutual fund

c) a common stock

d) a financial future

9. the long term financial market is also called :

a) the capital market

b) the money market

C) the speculative market

D) the intermediate market

11. Look at the oulcoses of the theee regression fo CAT in the tables above. Ifyou coma fr S&P; 500 and Crude Oil Prices, you will see th only when evaluated on their own Oace you put becomes Psah es fr these both variables together into the same model p-vala coefficients are sigican non-significant for both of them What is the most likely reason of this oucome appropeiate variable to be incloded in a ulti-factor model A. Crude Oil Prices is not an B. S&P; 500 is based on too many securities to C Crude Oil Prices are too volatile to be used as a meaningful evaluation variable D. Crude Oil Prices and S&P; 500 index are likely very highly correlated with each ohe provide a GOD Average R St. Dev GOOGL 1.87% 617% DIS 1.80% 5.89% 12. Based on the graphs and table above, which one of these two sccurities is more likely to be selecte by a well-diversified investor who is trying to reduce the risk of his/her portfolio A. GOOGL because it has lower Beta B. GOOGL because it has lower R C. DIS because it has lower St Dev D. DIS because it has lower expected return

Explanation / Answer