Reference no: EM132866109
Questions -
Q1- What type of trading order would you give to your broker, If You believe the share price is approximately at the "fair" value and you want to buy shares of Intel, in order to diversify your portfolio. You want the trade to be done quickly and cheaply?
- market order
- Stop buy order
- Stop loss order
- limit order
Q2- You buy a share of stock for $85, hold it for one year, collect a $2.00 dividend and sell the stock for $95. What's your total return? (Ignore the taxes)?
- 2.50%
- 22.50%
- 5.3%
- 14.11%
Q3- Sara purchased 150 shares of Jareer's common stock on margin at SAR 120 per share. Assume the IMR Is 60% and the MMR is 30%. You will get a margin call if the stock drops below ....... (Assume the stock pays no dividends and Ignore interest on the margin loan.)
- SR 35.71
- SR 36.00
- SR 68.57
- SR 67.45
Q4- Sara is an investor who likes to take risks. She decided to add a new security to her financial portfolio. Which financial instrument she will tend to choose
- Almaral Co. Bonds
- Almaral.Co stock
- T-Bills
- Municipal bonds
Q5- In the derivative markets, the net profit in exercising a put option when the exercise price is $60 and the option premium :$5 and the stock price decreased to $40, is
- $0
- $10
- $15
- $20
Q6- Assume you purchased 200 shares of savola common stock on margin at SR40/share from your broker. If the Initial margin is 60%, the amount you borrowed from the broker is
- SR. 3,200
- SR. 4,800
- SR. 8,000
- SR. 11,200
Q7- Which one of the following Is a true statement regarding corporate bonds
- holders of corporate bonds have voting rights In the company
- A corporate convertible bond gives its holder the right to exchange it for a specified number of the company's common shares
- A corporate callable bond gives its holder the right to exchange it for a specified number of the company's common shares
- A corporate debenture is a secured bond
Q8- If you want to buy shares of Intel, but you believe that the current stock price is too high given the firm's prospects. If the: shares could be obtained at a price 5% lower than the current value, you would like to purchase shares for your portfolio. What type of trading order would you give to your broker?
- stop loss order, which will be executed only if the shares can be obtalned at a price 5% below the current price
- limit sell order, which will be executed only if the shares can be obtained at a price 5% above the current price
- limit buy order, which will be executed only if the shares can be obtained at a price 5% below the current price
- stop buy order, which will be executed only if the shares can be obtained at a price 5% below the current price
Q9- An investor purchases one municipal and one corporate bond that pay rates of return of 4.00% and 7.40% respectively. If the investor is in the 35% tax bracket, his after tax rates of return on the municipal and corporate bonds would be respectively
- Municipal 1.4%, and Corporate 2.59%
- Municipal 4.00%, and Corporate 2.59%
- Municipal 4.00%, and Corporate 3.51%
- Municipal 4.00 and Corporate 4.81%
Q10- You are bullish on SABIC stock. The current market price is SR30/ share. You invested SR5,000 of your own money, and borrowed additional SR 4,000 from your broker at an interest rate 5% semiannual. What will be your rate of return if the price goes up by 15% during the next year, and a dividend of SR 1.5/ share was paid during the year
- 10%
- 19%
- 21%
- 28%
Q11- The price quotations of treasury bills show a bid price of $4.92 and an ask price of $4.46. This means
- the dealer in treasury bills is willing to buy the bill at $4.92
- the dealer in treasury bills is willing to sell the bill $4.92
- the dealer in treasury bills is willing to buy the bill $4.46
- the dealer in treasury bills is willing to buy and sell at any price between $4.92
Q12- An Investor sold short 200 shares of common-stock at $78/share. If the initial margin requirement is 40%. This means he should add more equity in his account equaling to
- $6.240
- $9,360
- $15,600
- $21,840