Exam 2: Asset Classes and Financial Instruments

Which of the following indices is(are)market-value weighted? I.The S&P/TSX Composite Index. II.The Standard and Poor's Composite 500-Stock Index Response III.The Dow Jones Industrial Average.

The Value Line Index is an equally weighted geometric average of the return of about 1,700 firms.What is the value of an index based on the geometric average returns of three stocks,where the returns on the three stocks during a given period were 20%,-10%,and 5%?

Based on the information given for the three stocks,calculate the first-period rates of return (from t = 0 to t = 1)on a.a market-value-weighted index. b.an equally-weighted index c.a geometric index

Which of the following securities is a money market instrument?

The yield to maturity reported in the financial pages for Treasury securities

The call provision in Canada securities I.is used with Canada Bills. II.is used with Canada Bonds. III.gives the issuer the right to repurchase the security at par. IV gives the issuer the right to repurchase the security at a premium over par.

At what price could an investor purchase the following T-Bill? Days to Maturity Bid Asked Chg. Ask Yield 585 6.01 5.97 +0.01 6.11

Which one of the following statements is true?

With regard to a futures contract,the short position is held by

Consider the following three stocks: Stock Price Number of shares outstanding Stock A \ 40 200 Stock B \ 70 500 Stock C \ 10 600 Assume at these prices the value-weighted index constructed with the three stocks is 490.What would the index be if stock B is split 2 for 1 and stock C 4 for 1?

An investor purchases one municipal and one corporate bond that pay rates of return of 8% and 10%,respectively.If the investor is in the 20% marginal tax bracket,his or her after tax rates of return on the municipal and corporate bonds would be ________ and ______,respectively.

If a U.S.Treasury note has a bid price of $975,the quoted bid price in the Wall Street Journal would be

Which of the following is true regarding a firm's securities?

The price quotations of Canada bonds show an ask price of 104:08 and a bid price of 104:04.As a buyer of the bond what is the dollar price you expect to pay?

Which of the following statements is(are)true regarding municipal bonds? I.A municipal bond is a debt obligation issued by state or local governments. II.A municipal bond is a debt obligation issued by the federal government. III.The interest income from a municipal bond is exempt from federal income taxation. IV.The interest income from a municipal bond is exempt from state and local taxation in the issuing state.

Brokers' calls

The Canada Mortgage and Housing Corporation provides

You sold a futures contract on oats at a futures price of 233.75 and at the time of expiration the price was 261.25.What was your profit or loss?

With regard to a futures contract,the long position is held by

Discuss the advantages and disadvantages of common stock ownership,relative to other investment alternatives.