Question
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)
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.
- Passive management style
- Trades on the exchange
- Less tax efficient than mutual funds.
- Highly liquid
16 Which 2 phases in the Equity cycle would you reduce exposure to common stock?
- Peak and trough
- Expansion and contraction
- Trough and expansion
- 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
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