FINA 3315 UTA EXAM 1 PRACTICE QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
ALREADY GRADED A+
Commonly used multiples for determining and stocks value include
I - Price to earnings
II - Price to sales
III - Price to cash flow
IV - Price to dividends Ans✓✓✓I, II, and III only
Traditional portfolio managers prefer well known companies because?
I. stocks of well known firms tend to be less risky than stocks of lesser
known firms.− −
II. individuals are more apt to purchase a mutual fund if it contains
stocks of well known firms.−
III. window dressing encourages the purchase of well known stocks.−
IV. institutional investors tend to exhibit "herd like" behavior.
Ans✓✓✓All of the above (one, two, three, four)
Combining uncorrelated assets will Ans✓✓✓decrease the overall risk
level of a portfolio.
, To compute the present value of $1000 annuity Received at the end of
each of the next three years and discount at the rate of 5% per year, you
should use which of the following excel commands? Ans✓✓✓PV:
present value
Which one of the following Types of risk cannot be effectively
eliminated through portfolio diversification? Ans✓✓✓inflation risk
Beginning investors with small amounts to invest should Ans✓✓✓buy
mutual funds or exchange traded funds (ETFs).
Which of the following is not a wing scheme commonly used in creating
equity market indexes? Ans✓✓✓Industry weighted
The date on which an investor must be registered shareholder of the firm
in order to receive a dividend is called the? Ans✓✓✓Date of record
Companies offering their stock to the public for the first time usually
seek the assistance of Ans✓✓✓investment bankers
It is not unusual for bear markets to occur two or more times in any
given ten year period Ans✓✓✓True
Which of the following statements about short selling is (are) true?
CORRECT DETAILED ANSWERS (VERIFIED ANSWERS)
ALREADY GRADED A+
Commonly used multiples for determining and stocks value include
I - Price to earnings
II - Price to sales
III - Price to cash flow
IV - Price to dividends Ans✓✓✓I, II, and III only
Traditional portfolio managers prefer well known companies because?
I. stocks of well known firms tend to be less risky than stocks of lesser
known firms.− −
II. individuals are more apt to purchase a mutual fund if it contains
stocks of well known firms.−
III. window dressing encourages the purchase of well known stocks.−
IV. institutional investors tend to exhibit "herd like" behavior.
Ans✓✓✓All of the above (one, two, three, four)
Combining uncorrelated assets will Ans✓✓✓decrease the overall risk
level of a portfolio.
, To compute the present value of $1000 annuity Received at the end of
each of the next three years and discount at the rate of 5% per year, you
should use which of the following excel commands? Ans✓✓✓PV:
present value
Which one of the following Types of risk cannot be effectively
eliminated through portfolio diversification? Ans✓✓✓inflation risk
Beginning investors with small amounts to invest should Ans✓✓✓buy
mutual funds or exchange traded funds (ETFs).
Which of the following is not a wing scheme commonly used in creating
equity market indexes? Ans✓✓✓Industry weighted
The date on which an investor must be registered shareholder of the firm
in order to receive a dividend is called the? Ans✓✓✓Date of record
Companies offering their stock to the public for the first time usually
seek the assistance of Ans✓✓✓investment bankers
It is not unusual for bear markets to occur two or more times in any
given ten year period Ans✓✓✓True
Which of the following statements about short selling is (are) true?
