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Question 1 of 10
1. Question
Which of the following statement(s) is (are) true about odd-lot theory?
I. The odd-lot theory looks at customers trading in odd-lot (or small) numbers of stocks (1-99 shares), with the assumption these customers are usually wrong.
II. The odd-lot theory also called the contrarian theory.
III. The odd-lot theory takes the opposite position of a market segment.
IV. The odd-lot theory compares rising stocks to falling stocks daily to interpret market direction.Correct
The odd-lot theory looks at customers trading in odd-lot (or small) numbers of stocks (1-99 shares), with the assumption these customers are usually wrong. This theory is also called the contrarian theory as it takes the opposite position of a market segment.
Incorrect
The odd-lot theory looks at customers trading in odd-lot (or small) numbers of stocks (1-99 shares), with the assumption these customers are usually wrong. This theory is also called the contrarian theory as it takes the opposite position of a market segment.
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Question 2 of 10
2. Question
Which of the following statement is true about Dividend payout ratio?
Correct
Dividend payout ratio: common dividend/earnings per share
Incorrect
Dividend payout ratio: common dividend/earnings per share
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Question 3 of 10
3. Question
By following which formula will you calculate the Acid test ratio?
Correct
Acid test ratio: (cash + marketable securities)/current liabilities
Incorrect
Acid test ratio: (cash + marketable securities)/current liabilities
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Question 4 of 10
4. Question
Which of the following is (are) the capitalization ratio formula(s)?
I. Long-term capital
II. Bond ratio
III. Dividend payout ratio
IV. Debt-to-equity ratioCorrect
These are capitalization ratio formulas:
•Long-term capital
•Bond ratio
•Debt-to-equity ratioIncorrect
These are capitalization ratio formulas:
•Long-term capital
•Bond ratio
•Debt-to-equity ratio -
Question 5 of 10
5. Question
Which of the following component(s) of a company is (are) analyzed under a fundamental analysis?
I. Company management
II. Balance sheets
III. Income statements
IV. Related data on the health of the corporationCorrect
A fundamental analysis is an industry risk analysis, which means you will analyze company management, balance sheets, income statements, and any other data on the health of the corporation.
Incorrect
A fundamental analysis is an industry risk analysis, which means you will analyze company management, balance sheets, income statements, and any other data on the health of the corporation.
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Question 6 of 10
6. Question
Over the long term, a stock can move up (an uptrend) or down (a downtrend.) These trends can show upin charts as-
I. Saucers
II. Inverted saucers
III. Head-and-shoulders configurations
IV. Resistance levelCorrect
Over the long term, a stock can move up (an uptrend) or down (a downtrend.) These trends can show up in charts as saucers, or inverted saucers, and head-and-shoulders configurations.
Incorrect
Over the long term, a stock can move up (an uptrend) or down (a downtrend.) These trends can show up in charts as saucers, or inverted saucers, and head-and-shoulders configurations.
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Question 7 of 10
7. Question
Which of the following factors require to be considered when comparing Municipal securities and mutual funds?
I. Repayment
II. Loads
III. Fees
IV. Asset allocationCorrect
When you compare Municipal securities and mutual funds for your customers, make sure you look at factors like repayment (for municipal securities), loads, fees, and asset allocation (for mutual funds).
Incorrect
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Question 8 of 10
8. Question
Which of the following theory(ies) can be applied when it comes to making decisions regarding customer’s portfolio?
I. Portfolio diversification
II. Capital asset pricing theory
III. Contrarian theory
IV. Dow theoryCorrect
When it comes to making decisions regarding your customer’s portfolio, there are several theories you can apply. These portfolio theories are:
•Portfoliodiversification
•Capital asset pricing theory (CAPT)Incorrect
When it comes to making decisions regarding your customer’s portfolio, there are several theories you can apply. These portfolio theories are:
•Portfoliodiversification
•Capital asset pricing theory (CAPT) -
Question 9 of 10
9. Question
Which of the following statement(s) is (are) true about Diversification?
I. A simple way to reduce risk incurred from individual securities’ performance is diversification.
II. Diversification means investing in stocks, bonds, and money-market instruments.
III. Diversification cannot protect a customer against market risk: when the market as a whole declines, the individual stocks will go down with it.
IV. Diversification is also called creating a trend line.Correct
A simple way to reduce risk incurred from individual securities’ performance is diversification. Diversification, as this book covered briefly when discussing portfolio allocation based on customer profiles, means invest- ing in stocks, bonds, and money-market instruments. Diversification cannot protect a customer against market risk: when the market as a whole declines, the individual stocks will go down with it.
Incorrect
A simple way to reduce risk incurred from individual securities’ performance is diversification. Diversification, as this book covered briefly when discussing portfolio allocation based on customer profiles, means invest- ing in stocks, bonds, and money-market instruments. Diversification cannot protect a customer against market risk: when the market as a whole declines, the individual stocks will go down with it.
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Question 10 of 10
10. Question
To try to quantify the risk associated with a certain stock, analysts created a formula which is called –
Correct
To try to quantify the risk associated with a certain stock, analysts created a formula called the capital asset pricing theory (CAPT).
Incorrect