11. Which of the following type of funds mirrors the market?

a) An equity fund.

b) A balanced fund.

c) A real estate fund.

d) An index fund

12. An investor purchased an equity fund several years ago at a total cost of $5,000

and sold it this year receiving $12,500 in total proceeds. During the holding

period, the investor reinvested $4,000 in income in additional fund units. What

is the investor's capital gain on the fund?

a) $1,750

b) $3,500

c) $5,500

d) $7,500

Use the following information to answer questions 13 to 14

ABC Inc. has decided to sell an additional 100,000 preferred and 200,000 common

shares. Currently ABC has 50,000 preferred shares and 200,000 common shares

outstanding.

13. Other things equal, how will this impact the quick ratio in the short-run?

a) It will increase.

b) It will decrease.

c) It will not change.

d) It cannot be determined.

Use the following information to answer questions 14

ABC Inc. has decided to sell an additional 100,000 preferred and 200,000 common

shares. Currently ABC has 50,000 preferred shares and 200,000 common shares

outstanding.

14. Other things equal, how will this impact the debt equity ratio in the short-run?

a) It will increase.

b) It will decrease.

c) It will not change.

d) It cannot be determined.

15. Which of the following is false about ETFs.

1. Passive management style
2. Trades on the exchange
3. Less tax efficient than mutual funds.
4. Highly liquid

16 Which 2 phases in the Equity cycle would you reduce exposure to common stock?

1. Peak and trough
2. Expansion and contraction
3. Trough and expansion
4. Contraction and peak

17. Given the following mutual fund data, what is the fund's rate of return using the

Modified Dietz method?

Beginning of period market value $23,250,000

End of period market value $27,500,000

Sum of each cash flow multiplied by its weight $112,300

Sum of cash flows within the period $100,000

a) 17.76 %

b) 17.80 %

c) 17.84 %

d) 18.28 %

18. Inflation is expected to rise by 2% in the very near future. All things being equal,

what would you expect to happen?

a) P/E ratios and stock prices to fall.

b) P/E ratios to rise and stock prices to fall.

c) P/E ratios to fall and stock prices to rise.

d) P/E ratios to rise and stock prices to rise.

19. If a company's EPS was $ 1.23 last year and $1.41 was recorded for this year,

what is the "trend ratio" for this year? (Assume that last year's value was the 'base'

year.)

a) 0.87

b) 1.15

c) 18.00

d) 114.63

20. If FGH Inc. reports a quick ratio of 2:1 and current

liabilities of $15,000, what is the company's current assets?

a) $5,000

b) $10,000

c) $30,000

d) $20,000