FIN 501 INVESTMENT ANALYSIS PRACTICE QUESTIONS WITH ACCURATE SOLUTIONS
WITH WELL SOLVED SOLUTIONS
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is
60% and the
maintenance margin is 40%. What is your equity after this transaction.
$7,740
Technical analysis is the study of which one of the following as the basis for trading?
systematic risk
dividend growth
financial statements
historical prices
Historical Prices
Which of the following has the obligation to sell a stock at the strike price when an option is
exercised?
call holder
call writer
put writer
put holder
put writer
,Allison's portfolio has an expected return of 14% and a standard deviation of 20%. Brianna
's portfolio has an expected rate of return of 11% and a standard deviation of 12%. The risk-
free rate is 3%. According to the Sharpe measure
Allison has the better portfolio.
Brianna has the better portfolio.
the portfolio's are equally desirable.
the answer depends on Allison and Brianna's risk tolerance.
Brianna has the better portfolio.
You purchased one SPX put option with a strike of 1,400. You wrote one SPX put option with
the same maturity date and a strike of 1,300. At maturity, what is your total payoff if the S&P
500 index is 1,320?The contract multiplier is $100.
$8,000
Which of the following statements is false?
Every investor is risk averse.
Every investor should have stocks in their portfolio.
M2 ratio compares portfolio performance to performance of market index.
Low Treynor ratios indicates better performance
Low Treynor ratios indicates better performance
, A $1,000 face value bond has a 7 percent coupon and pays interest semiannually. The bond
matures in 2 years and has a yield to maturity of 6.8 percent. What is the Macaulay
duration?
1.90 years
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is
60% and the maintenance margin is 40%. At which price will you receive a margin call?
49.13
The Pegi Co. has current annual sales of $350,000 and a net profit margin of 6%. Sales are
expected to increase by 5% annually while the profit margin is expected to remain
constant. What is the projected earnings for three years from now?
$24,310
Ashley got into a long position of 5 September 2022 Silver contracts at 20.500. Each
contract is for 5000 troy ounces of silver. The prices at COMEX exchange are quoted as
dollars per troy ounces. Her broker asked her to deposit 5% of the position as the initial
margin. The next two days the closing prices were as follows:
Closing Price
Day 1 20.05
Day 2 19.95
What is the balance of Ashley's account at the end of day 2?
$ 2,375
WITH WELL SOLVED SOLUTIONS
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is
60% and the
maintenance margin is 40%. What is your equity after this transaction.
$7,740
Technical analysis is the study of which one of the following as the basis for trading?
systematic risk
dividend growth
financial statements
historical prices
Historical Prices
Which of the following has the obligation to sell a stock at the strike price when an option is
exercised?
call holder
call writer
put writer
put holder
put writer
,Allison's portfolio has an expected return of 14% and a standard deviation of 20%. Brianna
's portfolio has an expected rate of return of 11% and a standard deviation of 12%. The risk-
free rate is 3%. According to the Sharpe measure
Allison has the better portfolio.
Brianna has the better portfolio.
the portfolio's are equally desirable.
the answer depends on Allison and Brianna's risk tolerance.
Brianna has the better portfolio.
You purchased one SPX put option with a strike of 1,400. You wrote one SPX put option with
the same maturity date and a strike of 1,300. At maturity, what is your total payoff if the S&P
500 index is 1,320?The contract multiplier is $100.
$8,000
Which of the following statements is false?
Every investor is risk averse.
Every investor should have stocks in their portfolio.
M2 ratio compares portfolio performance to performance of market index.
Low Treynor ratios indicates better performance
Low Treynor ratios indicates better performance
, A $1,000 face value bond has a 7 percent coupon and pays interest semiannually. The bond
matures in 2 years and has a yield to maturity of 6.8 percent. What is the Macaulay
duration?
1.90 years
Setter company's stock price is $43. You sold short 3 lots of the stock. The initial margin is
60% and the maintenance margin is 40%. At which price will you receive a margin call?
49.13
The Pegi Co. has current annual sales of $350,000 and a net profit margin of 6%. Sales are
expected to increase by 5% annually while the profit margin is expected to remain
constant. What is the projected earnings for three years from now?
$24,310
Ashley got into a long position of 5 September 2022 Silver contracts at 20.500. Each
contract is for 5000 troy ounces of silver. The prices at COMEX exchange are quoted as
dollars per troy ounces. Her broker asked her to deposit 5% of the position as the initial
margin. The next two days the closing prices were as follows:
Closing Price
Day 1 20.05
Day 2 19.95
What is the balance of Ashley's account at the end of day 2?
$ 2,375
