Question 1

Technical and fundamental analysis differ in that:

Accepted Answer

A)  fundamentalists do not believe that a share has some intrinsic value that is reliant upon fundamental economic factors 
B)  technical analysis relies solely upon information about the underlying company's products, markets and environment, whereas fundamental analysis relies on past trends of price and trading volume 
C)  technical analysis should not be considered as a complement but rather as a substitute for fundamental analysis 
D)  technical analysis relies solely on past trends of price and trading volume, whereas fundamental analysis relies upon information about the underlying company's products, markets and environment 
A)  fundamentalists do not believe that a share has some intrinsic value that is reliant upon fundamental economic factors 
B)  technical analysis relies solely upon information about the underlying company's products, markets and environment, whereas fundamental analysis relies on past trends of price and trading volume 
C)  technical analysis should not be considered as a complement but rather as a substitute for fundamental analysis 
D)  technical analysis relies solely on past trends of price and trading volume, whereas fundamental analysis relies upon information about the underlying company's products, markets and environment

Question 2

A _________ is a value above which it is difficult for the market to rise.

Accepted Answer

A) book value 
B) resistance level 
C) support level 
D) confidence level 
A) book value 
B) resistance level 
C) support level 
D) confidence level

Question 3

Charles Dow postulated that share price movements followed three types of behavior patterns over time,namely;pricing follows major trends,intermediate trends and long term trends.

Accepted Answer

A) True 
 B)False

Question 4

Other things being equal,a value firm compared with a growth firm will have:

Accepted Answer

A)  higher cost of capital 
B)  higher growth rate on assets 
C)  higher profitability 
D)  all of these choices 
A)  higher cost of capital 
B)  higher growth rate on assets 
C)  higher profitability 
D)  all of these choices

Question 5

The classification of a share into either the growth or value category:

Accepted Answer

A)  does not, of itself imply anything about the merits of each group or about stock selection 
B)  primarily stems from market analysts in regards to the classification into growth and value 
C)  all of the above 
D)  none of these choices 
A)  does not, of itself imply anything about the merits of each group or about stock selection 
B)  primarily stems from market analysts in regards to the classification into growth and value 
C)  all of the above 
D)  none of these choices

Question 6

Fama and French (1992)showed that,over 20 years,value firms outperformed growth firms in the USA by approximately __________ p.a.

Accepted Answer

A)  $ 8 \% $ 
B)  $ 13 \% $ 
C)  $ 20 \% $ 
D)  $ 25 \% $ 
A)  $ 8 \% $ 
B)  $ 13 \% $ 
C)  $ 20 \% $ 
D)  $ 25 \% $

Question 7

Fama and French (1992)find that,over a 20-year period in the USA,__________ outperformed __________.

Accepted Answer

A)  blue-chip shares; speculative shares 
B)  speculative shares; glamour shares 
C)  growth shares; value shares 
D)  none of these choices 
A)  blue-chip shares; speculative shares 
B)  speculative shares; glamour shares 
C)  growth shares; value shares 
D)  none of these choices

Question 8

A value firm will not have a relatively high book-to-market ratio.

Accepted Answer

A) True 
 B)False

Question 9

In the Australian share market,how much of the total market capitalisation is represented by the 10 largest companies?

Accepted Answer

A)  $ 12 \% $ 
B)  $ 42 \% $ 
C)  $ 57 \% $ 
D)  $ 88 \% $ 
A)  $ 12 \% $ 
B)  $ 42 \% $ 
C)  $ 57 \% $ 
D)  $ 88 \% $

Question 10

Other things being equal,a growth firm compared with a value firm will have:

Accepted Answer

A)  higher cost of capital 
B)  higher growth rate on assets 
C)  all of the above 
D)  none of these choices 
A)  higher cost of capital 
B)  higher growth rate on assets 
C)  all of the above 
D)  none of these choices

Question 11

Technical analysts will only ever use 'candle-stick' information when using charting techniques.

Accepted Answer

A) True 
 B)False

Question 12

__________ involves the examination of historical data on prices and volume to determine futures prices on the basis of trends.

Accepted Answer

A)  Historical forecasting 
B)  Experts' forecasting 
C)  Technical analysis 
D)  Investor forecasting 
A)  Historical forecasting 
B)  Experts' forecasting 
C)  Technical analysis 
D)  Investor forecasting

Question 13

When the market breaks through the moving average line from below,a technical analyst would probably suggest that it is a good time to ___________.

Accepted Answer

A) buy the stock 
B) hold the stock 
C) sell the stock 
D) short the stock 
A) buy the stock 
B) hold the stock 
C) sell the stock 
D) short the stock

Question 14

Which statement is true in relation to the book-to-market ratio:

Accepted Answer

A)  value shares have a low book to market ratio 
B)  a book-to-market ratio of (1) would mean that the book value in the balance sheet equals the current market value 
C)  the calculation is the number of shares multiplied by the market value of equity divided by 100 
D)  if the book value in the balance sheet equals the current market value then this would be known as a company of growth shares. 
A)  value shares have a low book to market ratio 
B)  a book-to-market ratio of (1) would mean that the book value in the balance sheet equals the current market value 
C)  the calculation is the number of shares multiplied by the market value of equity divided by 100 
D)  if the book value in the balance sheet equals the current market value then this would be known as a company of growth shares.

Question 15

BMIG Ltd has a current share price of $12.13.It is expected to pay $0.73 in dividends next period and it has a growth rate of 12%.What is the cost of equity capital for BMIG Ltd?

Accepted Answer

A)  $ 12.13 \% $ 
B)  $ 14.71 \% $ 
C)  $ 16.08 \% $ 
D)  $ 18.02 \% $ 
A)  $ 12.13 \% $ 
B)  $ 14.71 \% $ 
C)  $ 16.08 \% $ 
D)  $ 18.02 \% $

Question 16

In technical analysis,__________ is a value below which the market is relatively unlikely to fall.

Accepted Answer

A) book value 
B) resistance level 
C) support level 
D) the Dow line 
A) book value 
B) resistance level 
C) support level 
D) the Dow line

Question 17

Blue-chip shares usually move against the market and therefore they have a relatively low level of risk.

Accepted Answer

A) True 
 B)False

Question 18

In which of the following industries is a speculative investment NOT likely to be found?

Accepted Answer

A)  mining 
B)  property trusts 
C)  media 
D)  hi-tech 
A)  mining 
B)  property trusts 
C)  media 
D)  hi-tech

Question 19

An important assumption underlying the use of technical analysis techniques is that ___________________.

Accepted Answer

A) security prices adjust rapidly to new information 
B) security prices adjust gradually to new information 
C) security dealers will provide enough liquidity to keep price changes relatively small 
D) all investors have immediate and costless access to information 
A) security prices adjust rapidly to new information 
B) security prices adjust gradually to new information 
C) security dealers will provide enough liquidity to keep price changes relatively small 
D) all investors have immediate and costless access to information

Question 20

The process of fundamental analysis establishes whether the share is trading at a:

Accepted Answer

A)  price level consistent and relevant to the appropriate index 
B)  historic level compared to the overall market 
C)  discount, true value or premium 
D)  market price that is affordable 
A)  price level consistent and relevant to the appropriate index 
B)  historic level compared to the overall market 
C)  discount, true value or premium 
D)  market price that is affordable

Technical and fundamental analysis differ in that:

A _________ is a value above which it is difficult for the market to rise.

Charles Dow postulated that share price movements followed three types of behavior patterns over time,namely;pricing follows major trends,intermediate trends and long term trends.

Other things being equal,a value firm compared with a growth firm will have:

The classification of a share into either the growth or value category:

Fama and French (1992)showed that,over 20 years,value firms outperformed growth firms in the USA by approximately __________ p.a.

Fama and French (1992)find that,over a 20-year period in the USA, outperformed .

A value firm will not have a relatively high book-to-market ratio.

In the Australian share market,how much of the total market capitalisation is represented by the 10 largest companies?

Other things being equal,a growth firm compared with a value firm will have:

Technical analysts will only ever use 'candle-stick' information when using charting techniques.

__________ involves the examination of historical data on prices and volume to determine futures prices on the basis of trends.

When the market breaks through the moving average line from below,a technical analyst would probably suggest that it is a good time to ___________.

Which statement is true in relation to the book-to-market ratio:

BMIG Ltd has a current share price of $12.13.It is expected to pay $0.73 in dividends next period and it has a growth rate of 12%.What is the cost of equity capital for BMIG Ltd?

In technical analysis,__________ is a value below which the market is relatively unlikely to fall.

Blue-chip shares usually move against the market and therefore they have a relatively low level of risk.

In which of the following industries is a speculative investment NOT likely to be found?

An important assumption underlying the use of technical analysis techniques is that ___________________.

The process of fundamental analysis establishes whether the share is trading at a:

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Macro- and Industry Analysis of Share Markets

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

Exam 13: Qualitative Stock Selection

Technical and fundamental analysis differ in that:

A _________ is a value above which it is difficult for the market to rise.

Charles Dow postulated that share price movements followed three types of behavior patterns over time,namely;pricing follows major trends,intermediate trends and long term trends.

Other things being equal,a value firm compared with a growth firm will have:

The classification of a share into either the growth or value category:

Fama and French (1992)showed that,over 20 years,value firms outperformed growth firms in the USA by approximately __________ p.a.

Fama and French (1992)find that,over a 20-year period in the USA,__________ outperformed __________.

A value firm will not have a relatively high book-to-market ratio.

In the Australian share market,how much of the total market capitalisation is represented by the 10 largest companies?

Other things being equal,a growth firm compared with a value firm will have:

Technical analysts will only ever use 'candle-stick' information when using charting techniques.

__________ involves the examination of historical data on prices and volume to determine futures prices on the basis of trends.

When the market breaks through the moving average line from below,a technical analyst would probably suggest that it is a good time to ___________.

Which statement is true in relation to the book-to-market ratio:

BMIG Ltd has a current share price of $12.13.It is expected to pay $0.73 in dividends next period and it has a growth rate of 12%.What is the cost of equity capital for BMIG Ltd?

In technical analysis,__________ is a value below which the market is relatively unlikely to fall.

Blue-chip shares usually move against the market and therefore they have a relatively low level of risk.

In which of the following industries is a speculative investment NOT likely to be found?

An important assumption underlying the use of technical analysis techniques is that ___________________.

The process of fundamental analysis establishes whether the share is trading at a:

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Macro- and Industry Analysis of Share Markets

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

Fama and French (1992)find that,over a 20-year period in the USA, outperformed .