1. A margin account requires an initial margin of 50% and a margin call will occur if the stock price depreciates to $13.33. If stocks were initially purchased at $20, the maintenance margin is closest to:

A.50% B.67% C.25%

2. If an insider cannot take advantage and trade on private information to make abnormal profits, then a market is likely to be considered :

A. strong form efficient B.weak form efficient and semi strong form efficient only C.only semi strong form efficient

3. A number of different models may be used to value stocks. All of the following are examples of present value models except:

A.dividend discount model B.free cash flow to equity model C.P/E multiple model

4. Analysts forecasts which focus a top-down approach to forecasting future performance are most likely paying attention to:

A.signals from individual companies within an industry first B.microeconomic factors such as dividend yields on bio-technology stocks(shares) C.macroeconomic factors such as gross domestic product(GDP)

5.Which of the following statements is FALSE:

A.public companies typically have access to much larger amounts of capital through the public markets. B.the two advantages of going public are greater liquidity and better access to capital. C.the process of selling stock to the public for the first time is called seasoned equity offering(SEO)

6. You have placed a buy market-on-open order - a market order that would automatically be submitted at the market's open tomorrow and would fill at the market price. Your instruction, to buy the shares at the market open, is a(n):

A.execution instruction B.validity instruction C.clearing instruction

7. An analyst has gathered the following information for a company.

expected earnings per share $9.96

expected dividends per share $1.57

expected dividends growth rate 2.00%

required rate of return 6.00%

Based on the information provided the price/earnings ratio of this company is closest to:

A3.94 B.16.67 C.25.00

8. If an Australian based investor purchases a Euro-denominated Exchange Traded Fund(ETF) and the Euro subsequently depreciates in value-relative to the Australian dollar, the Australian dollar return will have a total return that is:

A.The same as the ETF's total return B.lower than the ETF's total return C.higher than the ETF's total return

9. Use the following information in the table below to answer the question.

Nero Nero

Financial year ending 2018 2019

market price $32.73 $36.47

total shares outstanding 5,000,000 6,000,000

total shareholder's equity $58,500,000,00 $60,500,000,00

net income $7,262,091,27 $7,430,813,02

Based on the information given the Accounting Return on Equity for Nero in 2019 is closest to:

A.8.40% B.3.99% C.12.49%

10. Which of the following statements is most likely FALSE?

A.we should use the general dividend discount model to value the stock of a irm with rapid or changing growth B.the dividend discount model values the stock based on a forecast of the future dividends paid to shareholders C.as firms mature, their growth slows to rates more typical of established companies

11. The current price of a stock is $20 per share. You have $10,000 to invest. You borrow an additional $20,000 from your broker and invest $30,000 in the stock. If the maintenance margin is 30%, at what price will a margin call first occur?

A.$14.28 B.$19.05 C.$17.86

12.Use the following information in the table below to answer the question.

Blanc Blanc

Financial year ending 2018 2019

market price $35.46 $36.06

total shares outstanding 5,000,000 6,000,000

total shareholder's equity $63,000,000,00 $68,500,000,00

net income $7,189,067,16 $7,147,851,81

Based on the information given the price to book ratio for Blanc in 2019 is closest to:

A.2.59 B.2.63 C.2.86

13. A number of different models may be used to value different companies. Which of these would be most appropriate foe a newly growing technology firm which does not pay dividends and does not have many tangible assets:

A.price/book multiple B. asset based valuation model C. free cash flow to equity model

14. The tendency of uninformed individuals to overestimate the precision of their knowledge is known as:

A.herd-behaviour B.overconfidence bias C.disposition bias D.familiarity bias

15. Which of the following is least likely to be a reason for a company to issue equity securities on the primary market?

A.to increase return on equity B.to raise capital C.to increase liquidity

16. Why is trading volume an important consideration when undertaking technical analysis?

A.trading volume can be used as a signal to support price and market trends B.both are correct C.trading volume represents private information not incorporated in prices.

17. A trader who relies on a relative value model is least likely looking for situations that involve:

A.identifying the best time to switch between stocks and bonds B.buying expensive assets and selling cheap assets C.buying cheap assets and selling expensive assets

18. A publicly listed traded company is in financial distress. It is projected to stop paying dividends and is likely to stop trading as a going concern in the near future. Which of the following valuation methods would most likely be appropriate?

A.asset based valuation B.relative valuation using price to earnings ratio C. discounted dividend model with single period of growth

19. An analyst estimates the intrinsic value of a stock to be in the range $21.00 to $16.00. The current market price of the stock is $29.00. Assuming the analyst is correct, the current market price is:

A.fairly-valued B.over-valued C.under-valued

20. What would be the most likely reason for an equal-weighted index out performing a market-capitalisation index comprised of the same securities?

A.large-cap securities outperforming small-cap securities B.underperformance of large-cap securities C.small-cap securities outperforming large-cap securities

21. Assume ASX 200 forward earnings yield is 6% and the 10-year T-note yield is 5.6%. How are stocks valued according to the Fed model?

A.under-valued B.over-valued C.fairly-valued

22. A company is expected to pay a dividend of $3.26 in the following period. If the expected growth rate of this dividend is 1.00% and the expected rate of return or discount rate for this stock is 2.00%, the current share price in dollars is closest to: A.$326.00 B.$163.00 C.$329.26