1. You makeasingle deposit of $10,000 intoanaccount that pays14%per annum interest, compounding monthly. At the end of5years the total interest earnedisclosestto:

A.$10,000

B.$20,000

C.$7,000

D.$3,000

2-Shoes-R-UsLtd hasjust paidadividend of $2.15. The dividendisexpected to grow atasteady rate of5per cent per annuminperpetuity.Ifshareholders requirearate of return of15% p.a.,whatisthe market value of this share?

A.$22.58

B.$21.50

C.$15.05

D.$23.65

3- Under-pricing ofInitialPublic Offerings (IPOS) refersto:

1. Underwriting fees chargedbyinvestmentbanks.
2. A benefit received by the pre-IPO shareholders of the issuing company.

C.The extent to which the price of the issued shares trade below theIPOoffer priceon

itsfirst day of trading.

D.The extent to which the price of the issued shares trade above theIPOoffer priceon

itsfirst day of trading.

4.Barry bought100BallisticLtdshares for $20each.Barryhasdetailedhisexpectation of possible share pricesinone year'stime,inthree possible states of the economy(seebelow).Nodividends are expected.

State Probability Price(end

____________________ Yd)____Boom 0.5$24

Level 0.3 $20

Slump0.2 $18

Basedonthe above, the expected annual returnonBallisticLtdshares,is:

A.8.0%

B.12.0%

C.3.3%

D.20.0%

5.The Australian Securities and Investments Commission (ASIC)isresponsiblefor:

A-Market integrity and consumer protection across the financial system.

B-Setting standards for financial market behaviourinshare markets.

C-Setting standards to protect investor and consumer confidence.

D-All of theabove.

6.According to efficient market hypothesis, if markets are semi-strong efficient, investors may consistently earn abnormal returns by relyingon:

A- Past price trends.

B-Analysis of public company financial statements.

C-Insider private information.

D-Both public and private information.

7.Which of the followingbonds,selling atayield of 6%p.a,hasthe greatest interest rate risk?

8.

9.

A-20 year bond with10%couponrate.

B-20 year bond with 5% couponrate.

C-15year bond with 5% couponrate.

D-20 year zero couponbond.

8- Which of the followingisNOTacause of the Global Financial Crisis (GFC)?

A-High interest ratesinthe leadupto 2007.

B-Easy availability of mortgageloans.

C-Mortgages being on-soldbybanks rather than being retainedontheirbooks.

D-The increasing complexity and lack of transparency regarding financial instruments.

9-To repaya debt,Melanie agreed to pay $1,000oneach1stJuly from1stJuly 2005 to1stJuly 2014 inclusive (10 payments). However,norepayments have been made. What single payment should Melanie payon 1stJuly 2016 to repay the whole debt? Interestis6.5%p.a.(effectiverate).

A.$14,371.56

B.$15,305.71

C.$16,300.58

D.$9,005.56

A company issues $10 millioninpreference shares which each havea$50 par valueandofferadividend of 6% of par each year,inperpetuity. The share was issued at $49.00. The required annual rate of return of investors was closestto:

A.6.00%

B.12.25%

C.12.24%

D.6.12%