1- Which of the following is true regarding the Capital Asset Pricing Model (CAPM)?

A. It is a model that links the notions of risk and return B. Uses beta, the risk-free rate and the market return to define the required return on an investment C. As beta increases, the required return for a given investment increases D. All of the above are true.

2- Top down approach to Traditional Security Analysis involves the following three steps in which order?

A. Economic Analysis, Industry Analysis, Fundamental Analysis B. Economic Analysis, Fundamental Analysis, Industry Analysis C. Industry Analysis, Fundamental Analysis, Economic Analysis D. Country Analysis, City Analysis, Stock Analysis

3- Net Profit Margin, ROA and ROE are ratios included in which category of Financial Ratios? A. Liquidity Ratios B. Activity Ratios C. Leverage Ratios D. Profitability Ratios

4- To have an efficient market, you must have which of the following characteristics?

A. Many knowledgeable investors actively analyzing and trading stocks B. Information that is only available to professional money managers C. Investors react quickly and accurately to new information D. A and C only

5- The investor behavior that allows investors to take credit for successes and blame others for failures is referred to as

A. Self-Attribution bias B. Loss Aversion C. Overconfidence D. Belief Perseverance

6- Investors that use Technical Analysis tend to sell when stocks break through a line of _____. A. Resistance B. Support C. High Prices D. Low Prices

7- The single most important factor that affects bond prices in the market is?

A. Inflation Rate B. Interest Rates C. Stock Market D. Federal Reserve Policy

8- The number of shares of common stock into which a convertible issue can be converted is called:

A. Conversion Price B. Conversion Period C. Conversion Ratio D. Conversion Privilege

9- The pricing of bonds include the following components:

A. Future value of the annuity of annual interest income plus present value of the bonds par value B. Future value of the annuity of annual dividends plus future value of the bonds par value C. Present value of the annuity of annual dividends plus present value of the bonds par value D. Present value of the annuity of interest income plus present value of the bonds par value

Duration measures which risk?

A. Liquidity risk B. Maturity risk C. Interest Rate risk D. Reinvestment rate risk