Question

Q. Microeconomics includes the study of factors that:
1. influence the supply of a product.
2. affect the level of national income.
3. determine the general price level of the economy.
Q. A product whose consumption is positively correlated with another is known as:
1. an inferior product.
2. a substitute product.
3. a complementary product.
Q. In a rights offering, the exercise price relative to the market price is generally:
1. lower.
2. the same.
3. higher.
Q. What position do investors have when they buy shares in a company?
1. Long
2. Short
3. Hedged
Q. Which of the following is most likely a benefit of real estate investments?
1. Low correlation to a portfolio of equity and fixed income investments
2. High investment liquidity relative to equity and fixed income investments
3. High availability of investment information relative to equity and fixed income investments
Q. In the structure of a typical private equity fund, investors are commonly referred to as:
1. limited partners.
2. general partners.
3. public shareholders.
Q. The buyer of an option contract:
1. receives the premium when the contract is initiated.
2. must trade the underlying asset at the exercise price.
3. has the right to trade the underlying asset at the exercise price.
Q. In primary security markets investors buy securities from:
1. traders.
2. issuers.
3. exchanges.
Q. In a best efforts public offering, the investment bank:
1. takes price risk.
2. acts as a broker.
3. guarantees the sale of the issue.
Q. To prevent the transfer of non-public information about future underwritings, a firm will most likely limit the contact between its research department and:
1. brokerage services.
2. proprietary trading.
3. investment banking.
Q. In periods of economic expansion, inflation will most likely:
1. decrease.
2. stay the same.
3. increase.
Q. A current account surplus most likely indicates a country with:
1. balanced capital flows.
2. net imports of services.
3. net exports of merchandise.
Q. A country’s comparative advantage in the extraction of commodities most likely stems from its:
1. high labour to capital ratio.
2. large amount of natural resources.
3. specialisation in capital intensive products. correct
Q. All else being equal, when the standard deviation is large, the normal distribution curve is:
1. tall and wide.
2. short and wide.
3. tall and narrow.
Q. Dealers are proprietary traders who:
1. fill orders for their clients by trading with them.
2. route their clients’ orders to exchanges or to brokers.
3. search for traders who are willing to take the other side of their clients’ orders.
Q. A provider of an index fund most likely uses a sampling replication procedure to track the index in order to:
1. reduce transaction costs.
2. select the constituent securities expected to provide the highest returns.
3. produce a portfolio that will include other securities besides those in the index.
Q. Purchase of a hotel property would most likely take place in:
1. brokered markets.
2. order-driven markets.
3. quote-driven markets.
Q. The market for a liquid stock is quoted at 25 bid, 26 offered. An order to sell is most likely to execute if the order submitted is:
1. sell limit 25.
2. sell limit 25.5.
3. sell limit 26.
Q. After issue, floating-rate bond coupons are affected by the:
1. credit spread.
2. reference rate.
3. conversion provision.
Q. The distinctive characteristic of enterprise risk management (ERM) is the:
1. independence of the risk management function.
2. support given to strategic and business planning.
3. consolidation and management of risks at the firm level.
Q. A downgrade of a bond reflects an increase in its:
1. credit risk.
2. liquidity risk.
3. interest rate risk.
Q. The expansion phase of the business cycle can be characterised by:
1. corporations’ declining stock values.
2. consumers reducing outstanding debt.
3. employees demanding higher wages.
Q. Bonds are:
1. real assets.
2. equity securities.
3. fixed-income securities.
Q. The key difference between a broker and a dealer is that:
1. dealers act as principals.
2. brokers act as market makers.
3. brokers trade directly with other market participants.
Q. Laws and regulations are designed primarily to:
1. promote fairness.
2. eliminate financial risk.
3. ensure competitive returns.
Q. Which real estate investment vehicle is typically chosen for public market investors?
1. Real estate equity funds
2. Real estate investment trusts
3. Real estate limited partnerships

Answer 1

Answer:

1: General level price level

2: Substitute

3:Lower

4:Long

5: 2nd option