exam 1 review - Review for Exam 1 Instructions: Please read...

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Unformatted text preview: Review for Exam 1 Instructions: Please read carefully x The exam will have 25 multiple choice questions and 5 work problems covering chapter 1, 2, 3, 4, 14, 16. x Questions in the multiple choice section will be either concept or calculation questions. The calculation questions will be similar to those in the homework and review. However, the concept questions will be related to any topic we have covered in the class. The concept questions in the review and homework are only some sample questions. You should NOT study only topics in the review and homework. x For the work problems, you need to solve the problems without knowing the possible answers. The questions will be similar to those in the homework and the review except that the possible solutions are not given. x You can bring a formula sheet to the exam. Chapter 1 1. There would be no _______________ in an efficient stock market. a. underpriced or overpriced stocks b. returns higher than 100% c. commission costs d. taxes 2. A _______________ represents an ownership share in a corporation. a. bond b. preferred stock c. common stock d. All of the above. e. B and C 3. In securities markets, the risk-return trade-off implies that assets with higher risk will offer investors _______________ expected returns. a. higher b. lower c. the same d. None of the above. 4. Allocation of the investment portfolio across broad asset classes refers to the _______________. a. security analysis b. top-down portfolio construction c. asset allocation d. None of the above. 5. Commercial banks are _______________. a. lending institutions b. borrowing institutions c. commercial intermediaries d. financial intermediaries 6. Investors can purchase new issues of securities in the _______________ market. a. secondary b. primary c. new d. IPO 7. American Depository Receipts are claims to _______________. a. foreign stocks b. American stocks c. North American stocks d. European stocks 8. Firms that specialize in helping companies raise capital by selling securities are called _______________. a. industrial banks b. Chapter 1 1. There would be no _______________ in an efficient stock market. a. underpriced or overpriced stocks b. returns higher than 100% c. commission costs d. taxes 2. A _______________ represents an ownership share in a corporation. a. bond b. preferred stock c. common stock d. All of the above. e. B and C 3. In securities markets, the risk-return trade-off implies that assets with higher risk will offer investors _______________ expected returns. a. higher b. lower c. the same d. None of the above. 4. Allocation of the investment portfolio across broad asset classes refers to the _______________. a. security analysis b. top-down portfolio construction c. asset allocation d. None of the above....
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This note was uploaded on 03/10/2011 for the course FMIS 3261 taught by Professor > during the Spring '11 term at University of Minnesota Duluth.

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exam 1 review - Review for Exam 1 Instructions: Please read...

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