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Question 1 of 10
1. Question
A normal yield curve has the following characteristics, except:
Correct
A normal yield curve has an upward sloping shape, with lower yields corresponding to short-term bonds and higher yields corresponding to long-term bonds.
Incorrect
A normal yield curve has an upward sloping shape, with lower yields corresponding to short-term bonds and higher yields corresponding to long-term bonds.
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Question 2 of 10
2. Question
Which of the following best defines economic indicators?
Correct
Economic indicators are (usually) large-scale economic data used to construe current economic conditions and forecast potential economic conditions.
Incorrect
Economic indicators are (usually) large-scale economic data used to construe current economic conditions and forecast potential economic conditions.
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Question 3 of 10
3. Question
The most commonly used and generally accepted economic indicators include the following, excluding:
Correct
The five most commonly used and generally accepted economic indicators include the following:
-GDP
-Employment indicators, such as the national unemployment rate
-Trade deficit
-Balance of payments
-CPIIncorrect
The five most commonly used and generally accepted economic indicators include the following:
-GDP
-Employment indicators, such as the national unemployment rate
-Trade deficit
-Balance of payments
-CPI -
Question 4 of 10
4. Question
Which is the following indicators is a measure of inflation?
Correct
CPI (Consumer Price Index) is a measure of inflation.
Incorrect
CPI (Consumer Price Index) is a measure of inflation.
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Question 5 of 10
5. Question
How many main parts does a financial statement have?
Correct
There are three main parts to a financial statement: income statement, balance sheet, statement is cash flows.
Incorrect
There are three main parts to a financial statement: income statement, balance sheet, statement is cash flows.
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Question 6 of 10
6. Question
Which of the following is true about debt to equity ratio?
I. It is also called liquidity ratio.
II. Debt to equity ratio = total liabilities/owners’ or shareholders’ equity
III. Debt to equity ratio = (total liability – current liability)/ total equity
IV. It is a measurement of a company’s liabilities (debt) compared to owners’ or shareholders’ equity.Correct
The debt-to-equity ratio is a measurement of a company’s liabilities (debt) compared to owners’ or shareholders’ equity. These numbers are located on the balance sheet. The debt-to-equity ratio can be solved using the following equation: debt-to-equity ratio = total liabilities/(owners’ or shareholders’ equity)
Incorrect
The debt-to-equity ratio is a measurement of a company’s liabilities (debt) compared to owners’ or shareholders’ equity. These numbers are located on the balance sheet. The debt-to-equity ratio can be solved using the following equation: debt-to-equity ratio = total liabilities/(owners’ or shareholders’ equity)
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Question 7 of 10
7. Question
Which of the following statement is false?
I. The quick ratio helps investors determine short-term liquidity.
II. The current ratio helps determine if the company is capable of meeting short-term obligations with short-term assets.
III. The quick ratio compares current assets less inventory to current liabilities.
IV. The current ratio gives a truer picture of a company’s condition than quick ratio.Correct
The current ratio, or liquidity ratio, gives the investor a snapshot of the company’s current condition by comparing current assets to current liabilities. This helps determine if the company is capable of meeting short-term obligations (debt and accounts payable) with short-term assets (cash, inventory, and accounts receivable).
The quick ratio helps investors determine short-term liquidity by comparing current assets less inventory to current liabilities. This ratio tends to give a truer picture of the company’s condition than the current ratio because it excludes inventory from the equation. Some companies struggle to move inventory, and this can prove problematic when figuring liquidity with the current ratio.Incorrect
The current ratio, or liquidity ratio, gives the investor a snapshot of the company’s current condition by comparing current assets to current liabilities. This helps determine if the company is capable of meeting short-term obligations (debt and accounts payable) with short-term assets (cash, inventory, and accounts receivable).
The quick ratio helps investors determine short-term liquidity by comparing current assets less inventory to current liabilities. This ratio tends to give a truer picture of the company’s condition than the current ratio because it excludes inventory from the equation. Some companies struggle to move inventory, and this can prove problematic when figuring liquidity with the current ratio. -
Question 8 of 10
8. Question
Which of the following statement is false?
I. The prospectus contains a detailed financial profile of a company.
II. During the cooling off period, underwriters can advertise for the offering and solicit indications of interest.
III. The effective date is the date when the cooling-off period ends.
IV. The filing date usually follows the effective date.Correct
Detailed financial profile, are in the statement of additional information (SAI).
The filing date is the date when the (hopeful) issuer of securities files the requisite registration statement with the SEC. This filing date initiates the cooling-off period, which is at least twenty days long. The effective date is the date when the cooling-off period ends, that is, once the securities are cleared for public sale.Incorrect
Detailed financial profile, are in the statement of additional information (SAI).
The filing date is the date when the (hopeful) issuer of securities files the requisite registration statement with the SEC. This filing date initiates the cooling-off period, which is at least twenty days long. The effective date is the date when the cooling-off period ends, that is, once the securities are cleared for public sale. -
Question 9 of 10
9. Question
The following are false about unsystematic risk except:
I. It is defined as specific risk.
II. It is not specific to certain factors of the investment.
III. They are diversifiable risk.
IV. Political risk is an example.Correct
Unsystematic risk can be defined as specific risk, in that it is specific to certain factors of the investment, such as the industry. A shipping concern off the coast of Somalia may experience piracy as an unsystematic risk. Unsystematic risk may be described as diversifiable risk as it may be overcome through the diversification of a portfolio.
Incorrect
Unsystematic risk can be defined as specific risk, in that it is specific to certain factors of the investment, such as the industry. A shipping concern off the coast of Somalia may experience piracy as an unsystematic risk. Unsystematic risk may be described as diversifiable risk as it may be overcome through the diversification of a portfolio.
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Question 10 of 10
10. Question
Which of the following is not an example of an unsystematic risk?
I. Inflation risk
II. Political risk
III. Regulatory risk
IV. Business riskCorrect
Unsystematic risk can be defined as specific risk, in that it is specific to certain factors of the investment, such as the industry. Examples include:
-Business risk
-Regulatory risk
-Political risk
-Liquidity riskIncorrect
Unsystematic risk can be defined as specific risk, in that it is specific to certain factors of the investment, such as the industry. Examples include:
-Business risk
-Regulatory risk
-Political risk
-Liquidity risk