Pennfoster Exam: 081062RR - Topics in Investments
1. What are general obligation bonds?
A. Municipal bonds that are secured by revenue from specified facilities
B. Municipal bonds that are secured by the full faith and credit of the issuer
C. Corporate bonds that are secured by revenue from specific assets
D. Corporate bonds that are secured by the full faith and credit of the issuer
2. Unsecured debt is debt issued
A. without specific collateral pledged as security.
B. with security through a corporation's cash flow.
C. with collateral that's less than the total value of the debt.
D. with a call provision.
3. Which of the following will result from an increase in return on equity?
A. Increase in fixed costs
B. Increase in the tax rate
C. Decrease in cash on the balance sheet
D. Decrease in fixed costs
4. Which of the following is used to describe dividends plus the change in retained earnings?
A. Cash flow
B. Net income
C. Paid-in capital
D. Gross income
5. What's the Fed Funds Rate?
A. The discount rate minus the rate of inflation
B. The prime rate plus the CPI
C. The rate at which commercial banks borrow from the Federal Reserve discount window
D. The short-term rate at which banks lend to each other
6. If the nominal GDP was reported at $1,782.32 and inflation was 4.9%, what's the level of real GDP for the period?
A. $1,675.90
B. $1,699.07
C. $1,723.34
D. $1,631.24
7. A stock is currently priced at $22 a share while the $30 put option is priced at $5.22. The put option delta is -.25. What is the approximate put price if the stock increases in value to $25?
A. $5.27
B. $3.76
C. $4.97
D. $5.08
8. Which of the following is cash generated by a firm's normal business activities?
A. Operating cash flow
B. Paid-in capital
C. Net income
D. Retained earnings
9. How do call and put prices react to changes in sigma?
A. Fairly similarly
B. Puts move more dramatically than calls
C. Calls move more dramatically than puts
D. Neither puts nor calls react to changes in sigma
10. Which of the following is a primary goal of the Federal Reserve?
A. Generate full employment
B. Create a Goldilocks scenario
C. Encourage consumer spending
D. Purchase real estate assets
11. What's another term that could be used for implied standard deviation?
A. Beta
B. Implied volatility
C. Alpha
D. Covariance
12. A company has $8,300 of cash, equipment worth $87,500, inventory of $49,600, a building worth $345,000, and $72,400 of accounts receivable. What's the value of the total fixed assets?
A. $554,500
B. $432,500
C. $482,100
D. $562,800
13. Any information that could be reasonably expected to affect the price of a firm's securities is known as
A. earnings announcement.
B. event risk.
C. public information.
D. material nonpublic information.
14. Hedge funds may be referred to as __________ return funds, which implies that there is no relative benchmark against which to measure their performance.
A. weighted
B. relative
C. effective
D. absolute
15. A stock is currently priced at $44 a share while the $45 call option is priced at $1.22. The call option delta is .86. What is the approximate call price if the stock increases in value to $45?
A. $0.26
B. $1.98
C. $2.08
D. $0.96
16. Which of the following best describes a private activity bond?
A. A federal government agency bond comprised of mortgage securities
B. A municipal bond that is backed by the full faith and credit of a municipality
C. A tax-free municipal bond used to finance public facilities
D. A taxable municipal bond used to finance a facility used by a private business
17. Which of the following reports is filed with the SEC on an annual basis?
A. 10Q
B. 10K
C. Prospectus
D. Red herring
18. __________ market transactions result in an actual physical exchange of a commodity.
A. Options.
B. Stock.
C. Spot.
D. EFT.
19. A company has sales of $1,340,000 and cost of goods sold of $980,000. The firm expects sales to increase by 9 percent next year. What's the gross profit amount expected to be next year if the company uses the percentage of sales approach when compiling pro forma statements?
A. $374,600
B. $392,400
C. $356,800
D. $408,600
20. A STRIPS matures in 5 years, has a face value of $25,000, and has yield to maturity of 5.4 percent. What's the price?
A. $18,725.33
B. $17,914.98
C. $16,542.14
D. $19,152.95
1. What are general obligation bonds?
A. Municipal bonds that are secured by revenue from specified facilities
B. Municipal bonds that are secured by the full faith and credit of the issuer
C. Corporate bonds that are secured by revenue from specific assets
D. Corporate bonds that are secured by the full faith and credit of the issuer
2. Unsecured debt is debt issued
A. without specific collateral pledged as security.
B. with security through a corporation's cash flow.
C. with collateral that's less than the total value of the debt.
D. with a call provision.
3. Which of the following will result from an increase in return on equity?
A. Increase in fixed costs
B. Increase in the tax rate
C. Decrease in cash on the balance sheet
D. Decrease in fixed costs
4. Which of the following is used to describe dividends plus the change in retained earnings?
A. Cash flow
B. Net income
C. Paid-in capital
D. Gross income
5. What's the Fed Funds Rate?
A. The discount rate minus the rate of inflation
B. The prime rate plus the CPI
C. The rate at which commercial banks borrow from the Federal Reserve discount window
D. The short-term rate at which banks lend to each other
6. If the nominal GDP was reported at $1,782.32 and inflation was 4.9%, what's the level of real GDP for the period?
A. $1,675.90
B. $1,699.07
C. $1,723.34
D. $1,631.24
7. A stock is currently priced at $22 a share while the $30 put option is priced at $5.22. The put option delta is -.25. What is the approximate put price if the stock increases in value to $25?
A. $5.27
B. $3.76
C. $4.97
D. $5.08
8. Which of the following is cash generated by a firm's normal business activities?
A. Operating cash flow
B. Paid-in capital
C. Net income
D. Retained earnings
9. How do call and put prices react to changes in sigma?
A. Fairly similarly
B. Puts move more dramatically than calls
C. Calls move more dramatically than puts
D. Neither puts nor calls react to changes in sigma
10. Which of the following is a primary goal of the Federal Reserve?
A. Generate full employment
B. Create a Goldilocks scenario
C. Encourage consumer spending
D. Purchase real estate assets
11. What's another term that could be used for implied standard deviation?
A. Beta
B. Implied volatility
C. Alpha
D. Covariance
12. A company has $8,300 of cash, equipment worth $87,500, inventory of $49,600, a building worth $345,000, and $72,400 of accounts receivable. What's the value of the total fixed assets?
A. $554,500
B. $432,500
C. $482,100
D. $562,800
13. Any information that could be reasonably expected to affect the price of a firm's securities is known as
A. earnings announcement.
B. event risk.
C. public information.
D. material nonpublic information.
14. Hedge funds may be referred to as __________ return funds, which implies that there is no relative benchmark against which to measure their performance.
A. weighted
B. relative
C. effective
D. absolute
15. A stock is currently priced at $44 a share while the $45 call option is priced at $1.22. The call option delta is .86. What is the approximate call price if the stock increases in value to $45?
A. $0.26
B. $1.98
C. $2.08
D. $0.96
16. Which of the following best describes a private activity bond?
A. A federal government agency bond comprised of mortgage securities
B. A municipal bond that is backed by the full faith and credit of a municipality
C. A tax-free municipal bond used to finance public facilities
D. A taxable municipal bond used to finance a facility used by a private business
17. Which of the following reports is filed with the SEC on an annual basis?
A. 10Q
B. 10K
C. Prospectus
D. Red herring
18. __________ market transactions result in an actual physical exchange of a commodity.
A. Options.
B. Stock.
C. Spot.
D. EFT.
19. A company has sales of $1,340,000 and cost of goods sold of $980,000. The firm expects sales to increase by 9 percent next year. What's the gross profit amount expected to be next year if the company uses the percentage of sales approach when compiling pro forma statements?
A. $374,600
B. $392,400
C. $356,800
D. $408,600
20. A STRIPS matures in 5 years, has a face value of $25,000, and has yield to maturity of 5.4 percent. What's the price?
A. $18,725.33
B. $17,914.98
C. $16,542.14
D. $19,152.95
