Q1.

In a price weighted average stock market indicator series, the following type of stock has the greatest influence:

a.the stock with the lower price.

b.the stock with the highest price-earnings ratio.

c.the stock with the highest market capitalisation.

d.the stock with the lowest market capitalisation.

e.the stock with the highest price.

Q2.

To a technician that believed in the importance of volume, a bullish signal would occur when

a.prices increase on light volume.

b.prices increase on heavy volume.

c.prices decrease on light volume.

d.prices decrease on heavy volume.

e.prices increase on declining volume.

Q3.

Which of the following is NOT considered as an assumption of technical analysis?

a.Market value is determined solely by supply and demand.

b.Supply and demand are governed by both rational and irrational factors.

c.Security prices tend to move in trends that persist for an appreciable length of time.

d.Stock prices follow a random walk.

e.Changes in trend are caused by the shifts in supply and demand relationships.

Q4.

In 2019, Ming Berhad issued a RM150 par value preferred stock that pays an 8 percent annual dividend. Due to changes in the overall economy and in the company's financial condition, investors are now requiring a 16 percent return. What price would you be willing to pay for a share of the preferred if you receive your first dividend one year from now?

a.RM80

b.RM75

c.RM59

d.RM95

e.RM110

Q5.

If for the S&P Industrials Index, the profit margin was 0.18 and the equity turnover ratio was 12, the return on equity (ROE) would be

a.0.83 percent.

b.0.48 percent.

c.2.16 percent.

d.30.00 percent.

e.48.00 percent.

Q6.

Which of the following factors influence an investor's required rate of return?

a.The economy's real risk-free rate (RFR).

b.The expected rate of inflation (I).

c.A risk premium.

d.All of the above.

e.None of the above.

Q7.

A price range at which technicians would expect a substantial increase in the demand for a stock is called

a.support level.

b.resistance level.

c.basic level.

d.resistance limit.

e.normal level.

Q8. Which of the following is NOT characteristic of the "growth" phase in the industry life cycle?

a.Consumer will accept uneven quality.

b.Products have technical and performance differentiation.

c.Low profits.

d.High labour costs.

e.Many competitors.

Q9.Smart and Happy Berhad had a dividend payout ratio of 58% in 2019. The retention rate in 2019 was

a.0%.

b.42%.

c.58%.

d.32%.

e.None of the above.

Q10.Which are the two important competitive strategies advocated by Micheal Porter?

a.Low cost leadership, barrier to entry.

b.New entrant deterrent, differentiation.

c.Low cost leadership, differentiation.

d.Differentiation, monopolistic.

e.Monopolistic simulation, differentiation.

Q11. Which of the following is NOT considered a relative valuation technique?

a.Price-earnings ratio.

b.Price/cash flow ratio.

c.Price/book value ratio.

d.Price/sales ratio.

e.Price/cost of goods sold ratio.

Q12.Based on Stock Amin's beta of 0.9, the normal return is 9%. However, the actual return for Stock Amin was 10%. What is Stock Amin's abnormal rate of return?

a.1.0%

b.0.1%

c.0.1%

d.1.0%

e.1.1%

Q13.

An examination of the relationship between stock prices and the economy has shown that the relationship is

a.weak, and that stock prices turn after the economy does.

b.weak, and that stock prices turn before the economy does.

c.strong, and that stock prices turn after the economy does.

d.strong, and that stock prices turn before the economy does.

e. Nonexistent.

Q14. If two well-known technical analysts seldom agree on the interpretation of a certain technical pattern, this implies:

a.collusion between the two analysts.

b.technical rules are too complex.

c.technical rules are highly subjective.

d.not enough information has been gathered.

e.all of the above.

Q15.What is the dividend payout ratio if the price per share is RM50, earning per share isRM20,and dividend per share is RM4.5?

a.9 percent

b.40 percent

c.22.5 percent

d.25 percent

e.none of the above

Q16. Other things equal,

a.the higher the expected growth rate, the lower the P/E ratio.

b.if the risk-free rate rises, the required rate will decline.

c.as the required rate rises, the P/E ratio declines.

d.if the risk premium rises, the required rate will fall.

e.none of the above.

Q17.Which of the following is NOT considered a basic economic force?

a.Fiscal policy.

b.Monetary policy.

c.Inflation.

d.Price Earnings Ratio (P/E) ratio.

e.None of the above (that is, all are basic economic forces).

Q18.Which of the following behaviours is consistent with escalation bias?

a.Buying more of a stock as it increases in value.

b.Buying more of a stock as it decreases in value.

c.Selling a stock as it decreases in value.

d.Selling a stock as it increases in value.

e.Buying or selling a stock as it increases in value.

Q19.Which of the following would be inconsistent with an efficient market?

a.Information arrives randomly and independently.

b.Stock prices adjust rapidly to new information.

c.Price changes are biased.

d.Price changes are random.

e.Price adjustments are independent.

Q20.According to the dividend growth model, if a company were to declare that it wouldnever pay dividends, its value would be

a.based on earnings.

b.based on expectations.

c.higher than similar firms because it could reinvest a greater amount in new projects.

d.zero.

e.based on the capital asset pricing model.