test1 - Name _Exam A Key_ Midterm 1 FIN 4504 Equity and...

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A. Gubin 1 FIN4504 Name ________Exam A Key___________________ Midterm 1 FIN 4504 Equity and Capital Markets A. Gubin Summer 2008 Instructions . The total time for this test is 2 ½ hours. Questions 1-10 are worth 2 points each, questions 11- 12 are worth 5 points each, questions 13-17 are worth 4 points each, question 18 is worth 30 points, and questions 19-20 are worth 10 points each (for a total of 100 points for the entire exam). Partial credit will be given where appropriate for questions 13-22. Good luck! Multiple Choice . Circle the best/most correct response. 1. Peter Lynch is the most successful manager that ________________ has ever had. a. The Vanguard 500 fund b. Fidelity Magellan fund c. The University of Florida’s Foundation d. The Vanguard Windsor fund e. The Legg Mason Value Trust fund 2. In general, IPOs are ____________ in the short run and _____________ in the long run. a. overpriced; fairly priced b. underpriced; fairly priced c. overpriced; overpriced d. overpriced; underpriced e. underpriced; overpriced 3. _____________ is the only stock that has been in the DJIA since the inception of the index in 1896. a. Eastman Kodak b. US Steel c. General Electric d. Boeing e. JP Morgan 4. The current value of the Dow Jones Industrial Average’s divis or is _____________ . a. 30.000000 Of course I wouldn’t ask you to memorize this. But you b. 2.5631082 could figure it out: c. 0.0001256 There are 30 stocks in the DJIA, with an average price of $50ish. d. 0.1228340 So, if the current value of the DJIA is about 12,500, then e. 0.7420812 (30*50)/12500 = 0.12. The only answer close to that is D.
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A. Gubin 2 FIN4504 5. An investment advisor has decided to purchase gold, real estate, and bonds in equal amounts. This decision reflects which part of the investment process? a. Asset allocation b. Investment analysis c. Portfolio analysis d. Security selection 6. According to the efficient market hypothesis, there should be ______________ overpriced and _______________ underpriced securities. a. no, no b. no, some c. some, no d. some, some 7. Spinning, as we described it in class is ____________ . a. Frequent buying and selling to generate commissions as a “kickback” to investment banks for favorable IPO allocations. b. The random selection of stocks for a portfolio c. An agency problem between stockholders and bondholders d. A sophisticated form of bribery 8. The ____________ market is the most unorganized market type. a. direct search b. broker c. dealer d. auction 9. The Dow Jones Industrial Average is a(n) __________-weighted index and the Standard and Poors 500 is a(n) ___________-weighted index. a.
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This note was uploaded on 12/03/2009 for the course FIN 4504 taught by Professor Banko during the Fall '08 term at University of Florida.

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test1 - Name _Exam A Key_ Midterm 1 FIN 4504 Equity and...

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