Question
1A) Which of the following situations is an example of a primary market transaction? a. A portfolio manager with the Peak Advisory Group purchases 10,000
1A) Which of the following situations is an example of a primary market transaction?
| a. | A portfolio manager with the Peak Advisory Group purchases 10,000 shares of stock. The broker-dealer purchases the shares by placing the buy order through an electronic trading platform which matches to another investment-advisor seller. | |
| b. | You purchase 100 shares of stock from another investor via the NASDAQ stock market. | |
| c. | Your firm issues 5,000,000 shares in an initial public offering. | |
| d. | An individual investor purchases 2,000 ADR shares. |
1B) You are considering the purchase of a corporate bond making semi-annual coupon payments. What will the market price be for a $10,000, 6% bond that matures in 10 years and pays semi-annually if the yield to maturity on bonds of similar risk and maturity is 5.4%?
| a. | $9,553.68 | |
| b. | $10,454.43 | |
| c. | $10,458.96 | |
| d. | $10,000.00 |
1C) You are seeking an investment with the best risk/return profile. Using the coefficient of variance, which security will be selected?
| a. | Stock A (expected return 8.4% and standard deviation 13.8%) | |
| b. | Stock B (expected return 17.9% and standard deviation 43.4%) | |
| c. | Stock C (expected return 13.4% and standard deviation 22.3%) | |
| d. | Stock D (expected return 14.1% and standard deviation 21.3%) |
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Financial Statement Analysis
Authors: Martin S. Fridson, Fernando Alvarez
5th Edition
1119457149, 978-1119457145
