MCQ (No need Working)

1. ______ established the link between a bonds price and interest rate changes.

a) modified duration

b) yield-to-call

c) yield to market

d) macaulay duration

2. Dividend yield is calculated by

a) multiplying a stocks semi-annual dividend by two

b) dividing a stocks annual cash dividends by its price.

c) dividing the annual change in the stocks price plus its annual dividend amount by the beginning of the year price.

d) d)dividing a stocks price by its annual cash dividend.

3. Factors should be considered in an asset allocation plans? 1. economic outlook, 2. Capital preservation 3. Changing investment goals, 4. Investor risk tolerance

a) 1,3 and 4 only

b) 2,3 and 4 only

c) 2 only

d) 1, 2 3, and 4

4. Hasan opens a cash account with a brokerage firm. He buys 100 shares of Globe stock at tk30 a share. His broker charges a commission of tk35.Which of the following statements concerning this transaction is correct?

a) Hasan must have tk3,035 in cash in his account within three business days.

b) Hasan must have tk2,965 in cash in his account on the day the trade is made.

c) Hasan must have tk3,035 in cash in his account on the day the trade is made.

d) Hasan must have tk2,965 in cash in his account within five business days.

5. In terms of bond investors which of the following statement is correct?

a) Aggressive investors purchase bonds when they believe interest rates will rise

b) Aggressive investors want to lock in high interest rates

c) Conservative investors buy bonds when interest rates are high

d) Conservative investors seek capital gains

6. If a bond has a face value of $1000, 6% annual coupon bond that is selling for $1012(answer this without calculation)

a) The yield-to-maturity is greater than 6%

b) The yield-to-maturity is 6%

c) The current yield is 6%

d) The current yield is less than 6%