Question 1

A _____ bond can be exchanged for shares of stock at the bond owner's discretion.

Accepted Answer

A)  stock 
B)  convertible 
C)  high yield 
D)  cumulative 
E)  call option 
A)  stock 
B)  convertible 
C)  high yield 
D)  cumulative 
E)  call option B

Question 2

$\begin{array}{|r|r|c|c|r|r|r|r|r|r}
\hline \begin{array}{r}
52-\text { Week } \
\text { High }
\end{array} & \begin{array}{r}
52-\text { Week } \
\text { Low }
\end{array} & \text { Stock } & \text { SYM } & \text { DIV } & \text { CLOSE } & \begin{array}{r}
\text { Net } \
\text { CHG }
\end{array} & \begin{array}{r}
\text { VOL. } \
100 \mathrm{~s}
\end{array} & \begin{array}{r}
\text { YLD } \
\%
\end{array} & \begin{array}{r}
\text { P/E } \
\text { Ratio }
\end{array} \
\hline 34.17 & 24.10 & \text { Laughing } & \text { LOL } & 2.34 & 32.68 & 0.03 & 214 & ? & 19 \
\hline 82.63 & 61.18 & \text { Distracted } & \text { BRB } & 0.80 & ? & 0.12 & 719 & 2.1 & 24 \
\hline 52.63 & 26.02 & \text { Hoppy } & \text { BZZR } & 0.10 & 48.16 & -0.41 & 984 & ? & 36 \
\hline
\end{array}$
-You purchased 100 shares of Laughing stock at the lowest price for the year. How much has the value of your shares changed since you made this investment?

Accepted Answer

A)  - $149 
B)  $3 
C)  $300 
D)  $642 
E)  $858 
A)  - $149 
B)  $3 
C)  $300 
D)  $642 
E)  $858 E

Question 3

Which of the following is NOT a characteristic of common stock?

Accepted Answer

A)  potential for capital gains 
B)  voting rights 
C)  ownerships in a corporation 
D)  dividend payments 
E)  fixed cash flow 
A)  potential for capital gains 
B)  voting rights 
C)  ownerships in a corporation 
D)  dividend payments 
E)  fixed cash flow E

Question 4

A security sold for less than its stated value is sold on a _____ basis.

Accepted Answer

A)  premium 
B)  short 
C)  present value 
D)  discount 
E)  par 
A)  premium 
B)  short 
C)  present value 
D)  discount 
E)  par

Question 5

The right, but not the obligation, to purchase an asset at a specified price is called a ____ option.

Accepted Answer

A)  European 
B)  Put 
C)  Call 
D)  American 
E)  Bermudan 
A)  European 
B)  Put 
C)  Call 
D)  American 
E)  Bermudan

Question 6

Money market instruments issued by a corporation

Accepted Answer

A)  Are debt obligations 
B)  Include both debt and equity securities 
C)  Cannot be traded once issued 
D)  Are risk-free 
E)  Can only be resold to the original issuer 
A)  Are debt obligations 
B)  Include both debt and equity securities 
C)  Cannot be traded once issued 
D)  Are risk-free 
E)  Can only be resold to the original issuer

Question 7

In Canada, coupon payments to bondholders are generally made:

Accepted Answer

A)  monthly. 
B)  bi-monthly. 
C)  quarterly. 
D)  semi-annually. 
E)  annually. 
A)  monthly. 
B)  bi-monthly. 
C)  quarterly. 
D)  semi-annually. 
E)  annually.

Question 8

Gold (CMX) 100 troy oz.; $ per troy oz.

$\begin{array}{|l|r|r|r|r|r|r|r|r|}
\hline & \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { \$Chg } & \text { Sea. Hi } & \text { Sea. Lo } & \text { Op. Int. } \
\hline \text { December } & 384.00 & 389.50 & 382.20 & 384.60 & 0.20 & 394.80 & 280.00 & 183.612 \
\hline \text { April } & 385.00 & 391.00 & 385.00 & 387.10 & 0.15 & 395.70 & 287.00 & 10,167 \
\hline
\end{array}$

-You purchased 7 December gold futures at the low price for the day and sold them at the last price for the day. What was your dollar profit?

Accepted Answer

A)  $1,680 
B)  $420 
C)  $1,260 
D)  $1,380 
E)  $1,520 
A)  $1,680 
B)  $420 
C)  $1,260 
D)  $1,380 
E)  $1,520

Question 9

An option contract that can only be exercised on the expiration date is called a(n) ________ option.

Accepted Answer

A)  European 
B)  put 
C)  call 
D)  American 
E)  Bermudan 
A)  European 
B)  put 
C)  call 
D)  American 
E)  Bermudan

Question 10

$\begin{array}{|r|}
\hline\$ 5.67 \
\hline \$ 9.99 \
\hline \$ 10.11 \
\hline \$ 2.56 \
\hline \$ 5.33\
\hline
\end{array}$
-You are told that the prices in the table above are from yesterday's price quote for LOL. They represent the daily high, daily low, close, 52 week high and 52 week low but are mixed-up and out of order. Which one MUST be yesterday's low price?

Accepted Answer

A)  $5.67 
B)  $9.99 
C)  $10.11 
D)  $2.56 
E)  $5.33 
A)  $5.67 
B)  $9.99 
C)  $10.11 
D)  $2.56 
E)  $5.33

Question 11

Futures on such things as cattle, wheat, or oil are called ______ futures.

Accepted Answer

A)  financial 
B)  real 
C)  commodity 
D)  asset backed 
E)  limit 
A)  financial 
B)  real 
C)  commodity 
D)  asset backed 
E)  limit

Question 12

A dividend payment on preferred stock:

Accepted Answer

A)  can never be omitted if the company is earning a profit. 
B)  cannot be omitted even at the discretion of the board of directors. 
C)  is automatically omitted if the company realizes a loss. 
D)  can be omitted at the discretion of the board of directors. 
E)  increases when the company has a profit and decreases when the company has a loss. 
A)  can never be omitted if the company is earning a profit. 
B)  cannot be omitted even at the discretion of the board of directors. 
C)  is automatically omitted if the company realizes a loss. 
D)  can be omitted at the discretion of the board of directors. 
E)  increases when the company has a profit and decreases when the company has a loss.

Question 13

A wheat farmer wishes to hedge his risk for the delivery of his crop in 4 months. Explain how this can be accomplished using futures contracts, and also discuss any potential disadvantages.

Accepted Answer

The farmer would sell futures contracts

Question 14

Preferred stock:

Accepted Answer

A)  Represents ownership interest in the issuer 
B)  Is required by law to pay a fixed dividend 
C)  Generally has a predetermined maturity date 
D)  Dividends can be omitted at the discretion of the company president 
E)  Always have cumulative dividends. 
A)  Represents ownership interest in the issuer 
B)  Is required by law to pay a fixed dividend 
C)  Generally has a predetermined maturity date 
D)  Dividends can be omitted at the discretion of the company president 
E)  Always have cumulative dividends.

Question 15

Gold (CMX) 100 troy oz.; $ per troy oz.

$\begin{array}{|l|r|r|r|r|r|r|r|r|}
\hline & \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { \$Chg } & \text { Sea. Hi } & \text { Sea. Lo } & \text { Op. Int. } \
\hline \text { December } & 384.00 & 389.50 & 382.20 & 384.60 & 0.20 & 394.80 & 280.00 & 183.612 \
\hline \text { April } & 385.00 & 391.00 & 385.00 & 387.10 & 0.15 & 395.70 & 287.00 & 10,167 \
\hline
\end{array}$

-What is your profit if you bought 12 December gold futures at the low price for the day and sold them at the high price for the day?

Accepted Answer

A)  $6,600 
B)  $7,820 
C)  $8,760 
D)  $7,240 
E)  $5,880 
A)  $6,600 
B)  $7,820 
C)  $8,760 
D)  $7,240 
E)  $5,880

Question 16

Which of the following option strategies has the greatest potential gain?

Accepted Answer

A)  Buy a call. 
B)  Sell a call. 
C)  Buy a put. 
D)  Sell a put. 
E)  Insufficient information. 
A)  Buy a call. 
B)  Sell a call. 
C)  Buy a put. 
D)  Sell a put. 
E)  Insufficient information.

Question 17

ABC Jewels issues some unsecured debt with a 6-month maturity. This debt is classified as a

Accepted Answer

A)  Call option 
B)  Futures contract 
C)  Money market instrument 
D)  Fixed-income securities 
E)  Derive security 
A)  Call option 
B)  Futures contract 
C)  Money market instrument 
D)  Fixed-income securities 
E)  Derive security

Question 18

Which of the following is a primary asset?

Accepted Answer

A)  Call option. 
B)  Common stock. 
C)  Futures. 
D)  Put option. 
E)  All of the above. 
A)  Call option. 
B)  Common stock. 
C)  Futures. 
D)  Put option. 
E)  All of the above.

Question 19

Assume that you purchase and will hold your investment to maturity or expiration. Which of the following instrument will have certainty future cash flows when you make your initial purchase?

Accepted Answer

A)  Futures. 
B)  Put options. 
C)  Stocks. 
D)  Bonds. 
E)  Call options. 
A)  Futures. 
B)  Put options. 
C)  Stocks. 
D)  Bonds. 
E)  Call options.

Question 20

$\begin{array}{|l|r|r|r|r|r|rr|r} 
\hline & & & & & & {\quad\quad\text { Lifetime }} && \text { Open } \
\hline & \text { Open } & \text { High } & \text { Low } & \text { Settle } & \text { Chg } & \text { High } & \text { Low } & \text { Int } \
\hline \text { Dee } & 107.97 & 108.97 & 107.88 & 108.72 & 0.72 & 121.56 & 102.44 & 432,512 \
\hline \text { Mar } & 106.91 & 107.50 & 106.47 & 107.31 & 0.81 & 116.72 & 101.16 & 19,531 \
\hline
\end{array}$

-What was the dollar value of the change in the March contract on this day?

Accepted Answer

A)  $796.75 
B)  $810.00 
C)  $836.50 
D)  $764.25 
E)  $718.75 
A)  $796.75 
B)  $810.00 
C)  $836.50 
D)  $764.25 
E)  $718.75

A _____ bond can be exchanged for shares of stock at the bond owner's discretion.

Which of the following is NOT a characteristic of common stock?

A security sold for less than its stated value is sold on a _____ basis.

The right, but not the obligation, to purchase an asset at a specified price is called a ____ option.

Money market instruments issued by a corporation

In Canada, coupon payments to bondholders are generally made:

An option contract that can only be exercised on the expiration date is called a(n) ________ option.

\ 5.67 \ 9.99 \ 10.11 \ 2.56 \ 5.33 -You are told that the prices in the table above are from yesterday's price quote for LOL. They represent the daily high, daily low, close, 52 week high and 52 week low but are mixed-up and out of order. Which one MUST be yesterday's low price?

Futures on such things as cattle, wheat, or oil are called ______ futures.

A dividend payment on preferred stock:

A wheat farmer wishes to hedge his risk for the delivery of his crop in 4 months. Explain how this can be accomplished using futures contracts, and also discuss any potential disadvantages.

Preferred stock:

Which of the following option strategies has the greatest potential gain?

ABC Jewels issues some unsecured debt with a 6-month maturity. This debt is classified as a

Which of the following is a primary asset?

Assume that you purchase and will hold your investment to maturity or expiration. Which of the following instrument will have certainty future cash flows when you make your initial purchase?

Lifetime Open Open High Low Settle Chg High Low Int Dee 107.97 108.97 107.88 108.72 0.72 121.56 102.44 432,512 Mar 106.91 107.50 106.47 107.31 0.81 116.72 101.16 19,531 -What was the dollar value of the change in the March contract on this day?

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Mutual Funds

The Stock Market

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters

Exam 4: Overview of Security Types

A _____ bond can be exchanged for shares of stock at the bond owner's discretion.

Which of the following is NOT a characteristic of common stock?

A security sold for less than its stated value is sold on a _____ basis.

The right, but not the obligation, to purchase an asset at a specified price is called a ____ option.

Money market instruments issued by a corporation

In Canada, coupon payments to bondholders are generally made:

An option contract that can only be exercised on the expiration date is called a(n) ________ option.

\ 5.67 \ 9.99 \ 10.11 \ 2.56 \ 5.33 -You are told that the prices in the table above are from yesterday's price quote for LOL. They represent the daily high, daily low, close, 52 week high and 52 week low but are mixed-up and out of order. Which one MUST be yesterday's low price?

Futures on such things as cattle, wheat, or oil are called ______ futures.

A dividend payment on preferred stock:

A wheat farmer wishes to hedge his risk for the delivery of his crop in 4 months. Explain how this can be accomplished using futures contracts, and also discuss any potential disadvantages.

Preferred stock:

Which of the following option strategies has the greatest potential gain?

ABC Jewels issues some unsecured debt with a 6-month maturity. This debt is classified as a

Which of the following is a primary asset?

Assume that you purchase and will hold your investment to maturity or expiration. Which of the following instrument will have certainty future cash flows when you make your initial purchase?

Lifetime Open Open High Low Settle Chg High Low Int Dee 107.97 108.97 107.88 108.72 0.72 121.56 102.44 432,512 Mar 106.91 107.50 106.47 107.31 0.81 116.72 101.16 19,531 -What was the dollar value of the change in the March contract on this day?

A Brief History of Risk and Return

Diversification and Risky Asset Allocation

The Investment Process

Mutual Funds

The Stock Market

Common Stock Valuation

Stock Price Behaviour and Market Efficiency

Behavioural Finance and the Psychology of Investing

Interest Rates

Bond Prices and Yields

Return, Risk and Security Management

Performance Evaluation and Risk Management

Options

Option Valuation

Futures Contracts

Projecting Cash Flow and Earnings

Corporate Bonds

Government Bonds and Mortgaged-Backed Securities

International Portfolio Investment

Filters