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FIN 351 DeVry Complete Quiz Package
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FIN 351 DeVry Week 1 Quiz Latest
1. (TCO 1) When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows:
o Large stocks, small stocks, lo
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1. (TCO 1) When ranking security returns from highest return to lowest return, the data shows that the annualized returns are as follows:
Large stocks, small stocks, long-term corporate bonds, long-term government bonds, and treasury bills.
Treasury bills, long-term government bonds, long-term corporate bonds, large stocks, small stocks
Large stocks, small stocks, long-term government bonds, long-term corporate bonds, and treasury bills.
Small stocks, large stocks, long-term corporate bonds, long-term government bonds, and treasury bills.
Question 2. Question : (TCO 1) A direct equity claim arises through investment in _____.
bonds and other debt instruments
common stocks, warrants, and options
preferred stock and commodity futures
Question 3. Question : (TCO 1) What factors must be considered in choosing between investment alternatives?
Risk and liquidity
Interest or dividends versus capital gains
Timeframe for managing funds and evaluating performance and tax effects
All of the above
Question 4. Question : (TCO 1) Which of the following is NOT a characteristic of an organized exchange?
An organized exchange functions as a primary market.
Securities are bought and sold in an auction market by brokers acting as agents for buyers and sellers in a central location.
An organized exchange may be either national or regional.
An organized exchange has a central location where all trading takes place.
Question 5. Question : (TCO 1) Secondary markets provide _____.
Question 6. Question : (TCO 1) The process of selling a new issue of securities so that the price is guaranteed to the selling firm is referred to as _____.
direct by issuer
Question 7. Question : (TCO 1) The first exchange to become a publicly traded company was the _____.
New York Stock Exchange
Chicago Board of Trade
NASDAQ Stock Market
Chicago Mercantile Exchange
Question 8. Question : (TCO 1) The _____ is the tax rate that applies to each new dollar of income.
average tax rate
short-term capital gains tax rate
long-term capital gains tax rate
marginal tax rate
Question 9. Question : (TCO 1) The index which gives equal weight to every company included, and is therefore not dominated by any single company, is the _____.
Dow Jones Composite Average
Standard & Poor's 400 Index
Value Line Average
American Stock Exchange Index
Question 10. Question : (TCO 1) The success of a short investment position depends on _____.
a level stock price
a declining stock market
an increasing stock price
declining interest rates
FIN 351 DeVry Week 2 Quiz Latest
1. (TCO 2) The primary purpose of fundamental stock valuation is to _____.
eliminate stocks of those companies that are potential losers from the portfolio
identify for purchase those companies that are fundamentally undervalued
learn to identify peaks and troughs of the business cycle
Question 2. Question : (TCO 2) Some of the major leading indicators would be _____.
money supply (M2), consumer expectations, and stock prices (S&P 500)
personal income, employees on nonagricultural payrolls, and industrial production
average prime rate charged by banks, labor cost per unit of output, and commercial and industrial loans outstanding
Question 3. Question : (TCO 2) In which stage of the industry life cycle are companies likely to be privately owned?
Question 4. Question : (TCO 2) The crossover point on the life cycle curve is the point where _____.
the company issues stock in an initial public offering (IPO)
the company gets listed on an organized exchange
the company's industry moves from the growth stage to the expansion stage
the industry's products begin to be accepted by the marketplace
Question 5. Question : (TCO 2) Which of the following statements about stock valuation based on asset value is NOT true?
Natural resources often give a company value, even if an income stream is not produced.
The value of the assets may not even appear on the balance sheet.
Current assets are usually excluded from the valuation process, since they will be used up in the next business cycle.
Hidden assets can add substantial value to the firm.
Question 6. Question : (TCO 2) The primary difference between dividend valuation models and earnings valuation models is _____.
selecting the appropriate discount rate
dividends are not considered in earnings models
whether the investor's income stream or the firm's income stream is measured
More than one of the above
Question 7. Question : (TCO 2) P/E ratios are influenced by a company's _____.
Question 8. Question : (TCO 2) The major device for measuring the profitability of a firm over a defined period of time is the _____.
statement of cash flows
None of the above
Question 9. Question : (TCO 2) Asset-utilization ratios measure _____.
productivity of fixed assets in terms of sales.
the relationship of sales on the income statement to various assets on the balance sheet.
the firm's ability to pay off short-term obligations as they come due.
Question 10. Question : (TCO 2) _____ ratios measure the impact of external market forces on the internal performance of a firm.
FIN 351 DeVry Week 3 Quiz Latest
1. (TCO 3) When viewing the terms "special returns” or “abnormal returns,” we know this can refer to _____.
the Efficient Market Hypothesis
gains in excess of the market risk-adjusted average
convertibles and warrants, etc.
Question 2. Question : (TCO 3) Legal methods for attempting to profit through mergers and acquisitions include all of the following, except identifying _____.
an insider close to the information
candidates through financial or operating characteristics
securities which are undergoing unusual volume or pricing patterns
industries where companies are being absorbed
Question 3. Question : (TCO 3) An acquisition may be canceled because of any of the following except _____.
an unusually high premium on stock price
a lawsuit brought by stockholders
disapproval of the target company's management
Question 4. Question : (TCO 3) New stock issues are considered a special investment situation, because _____.
they exhibit a very good long-term investment potential
the spread is greater than that in the secondary market
there is some evidence that new issues are underpriced
Question 5. Question : (TCO 3) Research on the strong form shows that _____ are able to achieve superior returns.
members of the SEC
corporate insiders and public officials
market specialists and corporate insiders
the majority of professional mutual fund managers
Question 6. Question : (TCO 3) According to the Dow Theory, daily fluctuations and secondary movements in the market are used to help identify _____.
a key indicator
a primary trend
shifts in demand and supply
Question 7. Question : (TCO 3) All of the following are smart money rules except ¬_____.
investment advisory recommendations
short sales by specialists
Barron's Confidence Index
Question 8. Question : (TCO 3) A low Barron's Confidence Index means that _____.
investors prefer stocks to bonds
the yield on bonds is greater than that on stock
low-quality bonds have returns much higher than high-quality bonds
low-quality bonds have returns slightly higher than high-quality bonds
Question 9. Question : (TCO 3) The problem in reading charts has always been _____.
with the errors that are frequently made in the graphing process
understanding the past market movements
in analyzing the patterns in such a fashion that they truly predict stock market movements before they unfold
Question 10. Question : (TCO 3) Smart money rules or approaches to the market include _____.
the put-call ratio
the odd-lot theory
FIN 351 DeVry Week 4 Quiz Latest
1. (TCO 4) The most important feature of municipal bonds is _____.
the wide range of denominations and maturities
that the interest is not taxable by the federal government
the risk-free nature of this investment
its appeal to investors needing growth
Question 2. Question : (TCO 4) For the major bond-rating agencies, the lowest level of an investment grade bond is _____.
AA (investment grade includes AAA and AA)
A (investment grade includes AAA, AA, and A)
BBB (investment grade includes AAA, AA, A, and BBB)
B (investment grade includes AAA, AA, A, BBB, BB, and B)
Question 3. Question : (TCO 4) A corporate bond quoted at 108.25 is selling for _____.
Question 4. Question : (TCO 4) Assume a $1,000 treasury bill is quoted to pay 7% interest over a three-month period. What will be the price of the treasury bill?
Question 5. Question : (TCO 4) When should an investor calculate both yield to maturity and yield to call?
An investor should calculate both yield to maturity and yield to call whenever there is a call provision.
An investor should calculate both yield to maturity and yield to call when the sum of the present values of the interest payments exceeds the call price.
An investor should calculate both yield to maturity and yield to call when the market price is greater than or equal to the call price.
An investor should calculate both yield to maturity and yield to call whenever the funds can be reinvested.
Question 6. Question : (TCO 4) What will happen to the market value of a bond if interest rates increase?
The market value will decrease.
The market value will increase.
The market value will increase or decrease, depending on the general economic climate.
The market value should remain level.
Question 7. Question : (TCO 4) Short-term interest rates have _____ volatility in comparison to long-term interest rates.
Question 8. Question : (TCO 4) The duration of a bond is determined by a combination of the maturity date and value, and _____.
the pattern of coupon payments
the call premium
the put premium
Question 9. Question : (TCO 4) Factors which influence the relationship between duration and maturity include all of the following EXCEPT _____.
the face value of the bond
the coupon rate of the bond
the number of years to maturity
Question 10. Question : (TCO 4) The duration on an 8%, 25-year bond is _____ the duration on a 9%, 30-year bond.
There is not enough information to tell
FIN 351 DeVry Week 5 Quiz Latest
1. (TCO 5) When is the best time to convert a convertible bond to common stock?
The best time to convert is when the call price exceeds the conversion value.
The best time to convert is after the conversion ratio decreases.
The best time to convert is when the conversion value is below the pure bond value.
Question 2. Question : (TCO 5) Which is the conversion ratio of a $1,000 bond convertible at $25.50 per share? The coupon rate is 10% and the market rate 12%. This company's common stock is currently trading at $22 per share.
Question 3. Question : (TCO 5) A put is said to be "in-the-money" when the strike price is _____ the market price.
Question 4. Question : (TCO 5) A major disadvantage of using call options to hedge a short position is that _____.
hedging increases the risk of loss on the short sale.
the option premium and commission reduce profit potential.
the price of the stock may go up
Question 5. Question : (TCO 5) A straddle is a combination of a put and call on _____.
the same stock, with the same strike price and expiration date.
different stocks, with the same strike price and expiration date.
different stocks, with different strike price and expirations dates.
the same stock, with the same the strike price and different expiration dates.
Question 6. Question : (TCO 5) An agreement which provides for the delivery of a given amount of something at a given time in the future, at a given price is called a(n) _____contract.
Question 7. Question : (TCO 5) The primary difference between options and futures is that _____.
the option premium is the full liability of the purchaser, while a futures contract may call for additional margin to hold the position
options are more speculative than futures
futures require the physical transfer of goods, while options do not
Question 8. Question : (TCO 5) The value of a stock index futures contract is the product of _____ and the appropriate multiplier.
the settle price
the change in the settle price
the difference between the settle price and the change
Question 9. Question : (TCO 5) Which of the following statements about hedging a stock portfolio with stock index futures is NOT true?
Futures contracts magnify gains (or losses) on the stock portfolio.
In a declining market, futures contracts help offset losses on the portfolio.
A risk-taker would probably not hedge the entire portfolio with stock index futures.
Question 10. Question : (TCO 5) The settle price shown in a stock index futures table is the _____.
highest price the contract hit during the day
closing price for the contract at the end of the day
price for the contract only for the last day of the contract
FIN 351 DeVry Week 7 Quiz Latest
Question 1. Question : (TCO 7) According to the text, a risk-averse investor _____.
demands a premium for assuming risk
will only participate in low-risk or risk-free investments
is one of a small minority in the United States
Question 2. Question : (TCO 7) Under Markowitz's theory, the ideal portfolio for an investor is represented by _____.
the point of tangency between the efficient frontier and the investor's indifference curve
the highest possible indifference curve
the highest possible point on the efficient frontier
Question 3. Question : (TCO 7) Systematic risk is rewarded with a premium in the marketplace because _____.
risk is particular to the stock or industry
it represents a random occurrence which could not have been foreseen
it is associated with market movements that cannot be eliminated through diversification
Question 4. Question : (TCO 7) Which of the following are assumptions of the capital asset pricing model?
Funds can be borrowed or lent in unlimited quantities at a risk-free rate.
The objective of all investors is to maximize their expected utility over the same one-period timeframe, using the same basis for evaluating investments.
There are no taxes or transaction costs associated with any investment.
Question 5. Question : (TCO 7) A good way to minimize risk and receive an optimum return on your portfolio is _____.
to buy only risk-free securities
through blue-chip stock purchases only
Question 6. Question : (TCO 7) Assume a portfolio has the possibility of returning 3%, 6%, 11%, or 16%, with the likelihood of 20%, 30%, 25%, and 25%, respectively. The expected value of the portfolio is _____.
Question 7. Question : (TCO 7) If the market rate of return is 10% and the beta on a particular stock is 1.00, the return on the stock will be _____.
greater than 10%
less than 10%
dependent on some other factor
Question 8. Question : (TCO 7) For two investments with a correlation coefficient (rij) greater than +1, the portfolio standard deviation will be _____ the weighted average of the individual investments' standard deviation.
zero compared to
Question 9. Question : (TCO 7) The capital asset pricing model (CAPM) takes off where the _____ concluded.
capital market line
efficient frontier and Markowitz portfolio theory
arbitrage pricing theory
Question 10. Question : (TCO 7) Using the formula for the security market line (Formula 21-7), if the risk-free rate (RF) is 6%, the market rate of return (KM) is 12%, and the beta (bi) is 1.2, compute the anticipated return for stock i (Ki).
13.2%een options and futures is that _____.
Question 7. Question : (TCO 7) If the market rate of return is 10% and the beta on a particular stock is 1.00, the return on th