0 [{"id":72764,"quiz_id":"5471","answer_id":null,"answerType_id":"0","created_at":"2016-05-25 22:11:21","updated_at":"2016-05-25 22:11:21","questionName":"If you are long a future an you believe the market has risen to its greatest level, you should","questionTimeSeconds":"0","questionTimeMinutes":"2","questionImagePath":null,"position":null,"explanation":"","question_score_id":null,"lang":null,"questionAudioPath":null},{"id":72754,"quiz_id":"5471","answer_id":null,"answerType_id":"0","created_at":"2016-05-25 22:01:06","updated_at":"2016-05-25 22:01:06","questionName":"If preferred stock is redeemable at the option of the issuer, it is ____ preferred.","questionTimeSeconds":"0","questionTimeMinutes":"2","questionImagePath":null,"position":null,"explanation":"","question_score_id":null,"lang":null,"questionAudioPath":null},{"id":72758,"quiz_id":"5471","answer_id":null,"answerType_id":"0","created_at":"2016-05-25 22:04:45","updated_at":"2016-05-25 22:04:45","questionName":"A share of preferred stock with a par value of $100 pays a 10 percent annual dividend. 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block

If you are long a future an you believe the market has risen to its greatest level, you should

Select the correct answer(s).  

(0/0)

---

Wait until the future's expiry.

Purchase a call option.

None of the above.

Short the corresponding future.

Go long another future.

none

If preferred stock is redeemable at the option of the issuer, it is ____ preferred.

Select the correct answer(s).  

(0/0)

---

payout

callable

cumulative

irregular

nominal

none

A share of preferred stock with a par value of $100 pays a 10 percent annual dividend. If the discount rate is 8 percent, the preferred stock is worth ____.

Select the correct answer(s).  

(0/0)

Explanation

The value of preferred is given by (Par Value * dividend yield) / discount rate. In our case, (100*0.1)/0.08 = 125

---

60

125

70

20

100

none

In the term "P-E ratio", the initials stand for ____.

Select the correct answer(s).  

(0/0)

---

price / earnings

preferred / earnings

par / earnings

price / expected

paid / expected

none

If you sell me a long All Ordinaries Share Price Index futures position at 2000 and the market rises to 2400, you shall make

Select the correct answer(s).  

(0/0)

Explanation

ou sell (short) a future while the index is 2000 points, and then the index rises to 2400 points, so you must pay the holder of the future the value of the 400 points, which by definiton of All Ordinaries futures, is $25/point. Thus you must pay the holde

---

-$10,000

$10,000

5,000

$5,000

$15,000

none

As each of the following Black-scholes option pricing model inout variables increase, S (aka F), E (aka X,K),T,Rf, σ, what happens to the price of the call option

Select the correct answer(s).  

(0/0)

Explanation

By definition, as S increase, so does the call price. As the exercise price increases, the call price decreases. Holding all else constant, an increased term to maturity increases the price of a call, as does an increased risk free rate and increased vola

---

-,+,+,+,-

-,-,+,+,+

+,+,+,-,-

+,-,+,-,+

+,-,+,+,+

none

Options and futures are similar in many respects. In which way are the NOT similar?

Select the correct answer(s).  

(0/0)

---

d. If not exercised, they are both valueless at expiry.

a. They both have expiry times.

c. They both are leveraged, derivative securities.

b. They both have an underlying value which permits the holder to transact at that underlying price at some time in the future.

e. All (a)-(d) are true.

none

Portfolio diversification reduces the variability of returns on each security held in the portfolio.

Select the correct answer(s).  

(0/0)

---

True

False

none

A constant dividend stock that is priced at $10 per share pays a dividend of $2. The required return is ___ percent.

Select the correct answer(s).  

(0/0)

Explanation

To find the required rate of return in this case we must caclulate (dividend / price) = 2 / 10 = .2, or 20%

---

20

10

50

2

5

none

Which of the following is not required to value a share of preferred stock?

Select the correct answer(s).  

(0/0)

---

a return the market requires.

the dividend rate of the preferred.

the market price of the share.

the dollar value of the preferred dividend.

the par value for the preferred.

none

A firm declared dividends of $1.10 last year and $1.32 this year. If it is a constant growth firm, the dividend expected next year is $____.

Select the correct answer(s).  

(0/0)

Explanation

We are told the firm is a constant growth firm, so we must calculate the growth rate of the dividends. (1.32 - 1.10) / 1.10 = .2, therefore, the dividends grow by 20% each year, the next dividend will be worth 1.32 * 1.2 = 1.584, rounded down to 1.58

---

1.20

1.58

1.52

1.54

1.90

none

An inventor's estimate of the true value of a share of stock is known as the ____ value.

Select the correct answer(s).  

(0/0)

---

call

intrinsic

market

cumulative

dividend

none

Shares in firms with high P-E ratios and strong earnings prospects are known as _____ stocks.

Select the correct answer(s).  

(0/0)

---

callable

intrinsic

common

cost of capital

growth

none

For a zero-growth firm that pays all earnings as dividends, the dividend yield is equal to the ____.

Select the correct answer(s).  

(0/0)

Explanation

For a zero growth firm, the inverse of the P-E ratio, (E/P) is the dividend yield.

---

dividend payout ratio

inverse of the P-E ratio

intrinsic value of the share

call price

required return on preferred stock

none

For an investor, common stock is usually a riskier investment than preferred stock of the same company because _____.

Select the correct answer(s).  

(0/0)

---

preferred stock dividends are deductible for income tax purposes.

preferred stock dividends are paid before common stock dividends.

preferred stock dividends are paid in nominal dollars.

preferred stock dividends are expected to grow.

common stock dividends are paid out of after-tax earnings.