FINRA Series 66 Free Practice Questions Quiz 09

Which of the following statements is/are true in regards of Range?
I. Small range is an indication of positive correlation in portfolio.
II. A small range is the sign of negative correlation in portfolio.
III. Range is the difference between highest return and lowest return of the portfolio.
IV. A large range is the sign of positive correlation in portfolio.

Which of these statements is/are true in regards of standard deviation?
I. Higher standard deviation represents a higher amount of volatility and risk.
II. Standard deviation is calculated based on the mean.
III.Standard deviation is a useful tool in investing and trading strategies,as it helps measure market and security volatility and predict performance trends.
IV. The more spread apart the data, the higher the deviation.

Which of the following statements hold true in regards of Beta?
I. A beta of greater than 1 indicates that the security’s price is theoretically more volatile than the market.
II. A beta of 1 indicates that the security’s price moves with the market.
III.Beta is a measure of the volatility of a security or a portfolio in comparison to the market as a whole.
IV. A beta of less than 1 means that the security is theoretically less volatile than the market.

On December 31, 2016, the balance sheet of Marshal company shows the total current assets of $1,100,000 and the total current liabilities of $400,000. Your are required to compute current ratio of the company?
I. 2.75
II. 2.57
III.1.05
IV. 3.25

Which of the following statements is /are regarding current ration?
I. Current ratios are least required when used to compare companies that are in the same industry.
II. Current ratios are most useful when used to compare companies that are in the same industry.
III Current ratio can be used to make a rough estimate of a company’s financial health.
IV. The current ratio is called liquidity ratio.

Which of the following statement is/are true in regards of quick ratio?
I. Its a useful inter-industry analytical tool.
II. Quick ratio should only be utilized in analyzing companies that are in the same industry.
III. Quick ration can be used for analyzing diversified industries.
IV. The quick ratio is an indication whether the company has adequate liquidity to meet its current debts and obligations.

ABC company has the following transaction in its financial statements for the period ended 1st January 2017 to 31st December 2017?
Current Asset
Cash = $100,000
Advance =$10,000
Marketable Security = $50,000
Account Receivable= $60,000
Inventories = $70,000
Total Current Asset = $290,000
Current Liabilities:
Account Payable =$160,000
Accural Expenses =$60,000
Interest Payable= $50,000
Short Term Debt= $50,000
Total Current Liabilities= $320,000
Evaluate the quick ratio of ABC company
I. 0.69
II. 1.2
III. 3.5
IV. 5.2

Calculate debt-to-equity ratio of a business which has total liabilities of $3,423,000 and shareholders’ equity of $5,493,000?
I. 1.62
II. 0.62
III. 0.75
IV. 3.4

Which of the following statements stands true for debt to equity ratio?
I. A company with a high debt- to-equity ratio maybe attractive to a young investor.
II. It is most effective when used to analyze companies within the same industry.
III. A company with a high debt- to-equity ratio maybe attractive to an investor seeking stability.
IV. The D/E ratio indicates how much debt a company is using to finance its assets relative to the value of shareholders’ equity.

Company XYZ that currently trades at $100.00 and has an earnings per share (EPS) of $5.00. Can you calculate that XYZ’s price-to-earnings ratio?
I. 5
II. 10
III. 25
IV. 20