1. Jim bought 4,000 shares of PP Telecom stock $35 per share 4 months ago. The stock paid a dividend of $1.1 per share. After receiving the dividend, Jim sold all 4,000 shares of stock at $36 per share. What is Jims holding period return (HPR)?

1. 2.86%
2. 3.14%
3. 4.26%
4. 6.00%

2. Which of the following is most related to default risk?

1. Interest rate
2. Inflation rate
3. Foreign exchange rate
4. Credit quality of the counter party

3. Which of the following is(are) correct?

1. Buying stocks through the brokers is a form of indirect investment.
2. Buying mutual fund from the mutual fund company is a form of indirect investment.

1. I only
2. II only
3. Both I and II
4. Neither I nor II

4. Which of the following is(are) function(s) of financial assets such as stocks?

1. Transfer of funds from those with surplus to those who need the funds.
2. Transfer to risk from those who would like to reduce their risk exposure to those who are willing to accept the risk.

1. I only
2. II only
3. Both I and II
4. Neither I nor II

5. Security X is a money market instrument. Which of the following is most correct?

1. Security X is a currency.
2. Security X is a derivative.
3. Security X is a debt instrument.
4. Security X is an equity instrument.