Can anyone help me solve these questions?

Question 1

Commodity trading appeals to individual investors because of

a. the favorable tax aspects.

b. the conservation of capital that is available through such trades.

c. the potential for high rates of return.

d. the current income offered by commodities.

Question 2

Which one of the following actions would be the most appropriate hedge to a short sale of common stock?

a. the sale of a put

b. the sale of a call

c. the purchase of a call

d. the purchase of a put

Question 3

Futures contracts can produce which of the following returns? I. dividends II. interest III. current income IV. capital gains

a. I and IV only

b. II and III only

c. I, III and IV only

d. IV only

Question 4

The return on a futures contract

a. tends to be fairly stable from one trading day to the next.

b. is always equal to or greater than zero.

c. is highly related to the low margin requirement.

d. is solely related to the current price of the underlying item.

Question 5

What is the return on invested capital to an investor who purchased a futures contract at a price of 308 and sells the contract for 313? The contract is on 5,000 units, requires a 5 percent margin deposit and is priced in cents per unit.

a. 32 percent

b. 2 percent

c. 100 percent

d. 40 percent

Question 6

The premium on a stock index call would be expected to increase as the

a. option life nears expiration.

b. market becomes more volatile.

c. market becomes less volatile and more predictable.

d. index price falls further below the strike price.

Question 7

Which one of the following statements concerning stock-index futures is correct?

a. With a stock index future, most of the risk that's involved in speculating in the stock market can be eliminated.

b. Money can be made in a bear market by taking a long position in stock-index futures.

c. Short selling stock-index futures contracts can be profitable in a bull market.

d. A stock-index futures contract can be sold short as a way to protect a well-diversified portfolio of common stock against a drop in the market.

Question 8

One drawback to investing in mutual funds is the

a. lack of information on the performance of the fund.

b. lack of liquidity of fund shares.

c. amount required for the initial investment.

d. annual management fee.

Question 9

Which of the following characteristics apply to put and call options? I. They are derivative securities. II. Their value is dependent upon the value of the underlying security. III. Buying options limits an investors' risk exposure. IV. They are based on a one year maturity.

a. I and II only

b. I and IV only

c. I, II and IV only

d. I, II and III only

Question 10

The conversion privilege provided by mutual fund families allows investors to

a. move from one fund family to another once every six months.

b. move from one fund to another without incurring any capital gains tax liability.

c. re-allocate their funds at any time as long as they pay an additional sales load on the transferred funds.

d. be more aggressive since they can re-allocate their funds when market conditions change.

Question 11

The seller of a futures contract

a. is legally bound to make delivery of the specified item on the specified day.

b. receives the entire contract amount at the time the contract is made.

c. must make delivery before receiving any monies on the contract.

d. has the option of canceling the contract the following day if the price is not acceptable to him/her.

Question 12

One type of mutual fund spreads investors' money across equity markets, bond markets, and money markets. Moreover, as market conditions change, the amount of money invested in each market sector will change. This type of mutual fund is known as a(n)

a. growth-and-income fund.

b. fiscally responsible fund.

c. asset allocation fund.

d. socially responsible fund.

Question 13

An investor bought 400 shares of stock when its price was $40 per share. The price of the stock is now up to $75 per share and the investor decides to hedge his position by purchasing 4 puts (each priced at $750 and each carrying an exercise price of 75). If, by the expiration date of the puts, the price of the stock falls to $50 per share, the investor would make a net profit of

a. $11,000.

b. $4,000.

c. $14,000.

d. $10,000.

Question 14

Last year at this time, Karen King bought 100 shares of an open-end mutual fund at $7.50 per share. Over the past year the fund has paid dividends of 90 cents per share and had a capital gains distribution of 80 cents per share. What is Karen's holding period return assuming that the current offer price is $8.50 and the NAV is $8.20?

a. 36.0 percent

b. 32.0 percent

c. 13.3 percent

d. 9.3 percent

Question 15

One of the major disadvantages of options is

a. their short lifespan.

b. the difficult execution process.

c. their cost.

d. their lack of liquidity.

Question 16

The risk-free rate of return is 5.5 percent, the expected market return is 11 percent, and the beta for Lea, Inc. is 0.85. What is Lea's required rate of return?

a. 14.9 percent

b. 10.2 percent

c. 4.7 percent

d. 15.7 percent

Question 17

Shortcomings of the price/sales ratio include which of the following? I. The price/sales ratio ignores operating expenses. II. The price/sales multiple is very volatile. III. The price/sales multiple applies only to dividend paying stocks. IV. The price/sales approach is based solely on historical performance.

a. II and IV only

b. III and IV only

c. I and II only.

d. I and III only