FINC+340-+FINAL+EXAM Multiple CHoice True False - FINC 340-...

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FINC 340- FINAL EXAM (100 POINTS)From-Week 5 thru Week 8(required and recommended Reading)A- TRUE/FALSE-ANSWER ANY21OF THE FOLLOWING(21points- 1point each)1-A portfolio that offers the lowest risk for a given level of return is known as an efficient
2-Studies have shown that investing in different industries as well as different countries
3-The mutual fund market is dominated by funds that invest in diversified bond portfolios.
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7-Like ordinary stocks, exchange traded funds (ETFs) can be sold short and most
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9-Unless the investor specifically requests otherwise capital gains are normally distributed
10-If the holding period return (HPR) of an investment is 20 percent before taxes for a ninemonth period, an investor in the 30 percent tax bracket would have an after-tax HPR of
11-Puts and calls are issued by the same corporation that issued the underlying stock.
12-Warrants are options that are attached to bond issues to make the bonds more attractive to
13-Writing covered calls protects the writer from losses if the price of the underlying stock
14-Unlike stocks and bonds, futures contracts trade only at specific times during normal
15-Futures contracts obligates a participant to buy or sell the commodity at the contractedprice unless the contract is canceled or liquidated before the expiration date.16-
17-Futures contracts have two sources of return namely the capital gains that can be earnedwhen prices move in a favorable fashion and dividend income from the underlying asset.
18-Corporate bonds are an appropriate alternative for an investor with a short-term timehorizon.19-The most important factor in determining the price of a corporate bond is the financial
20-Warrants and rights are both long-term call options to purchase shares of the stock of thecorporation issusing the warrants or rights.21-A call option is a contract that gives the holder the right to purchase a specified number
22-A put option is a contract that gives the holder the right to sell a specified number of
23-It is better for most individual investors to invest in mutual funds than to buy stocks and
24-Individual investors usually redeem their ETFs shares rather than sell them in the openmarket.

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Term
Fall
Professor
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Tags
Derivative, Investing, Strike price

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