o65 - 4
If an analyst wishes to determine the degree to which leverage was being employed by a subject company she would most likely examine that issuer's:
Debt to equity ratio
Credit risk is commonly defined as:
Default Risk
Which of the following is NOT a leading economic indicator?
Duration of unemployment
Sale of an issue of common stock
Public Offering
increased audit by the IRS when reporting a DPP
Risk of Audit
A client approaches the IAR handling the advisory account with a request to find a preferred stock that will offer 6% income return. The IAR suggests a stock paying a $.28 quarterly dividend. That stock will meet the income objective if it has a current market price of:
$18.67
An individual owns assets worth $500K and has debts of $300K, what is the individuals net worth?
$200K
an organization or individual w/ Net worth >$1M or >$200K annual income the previous 2 years
Accredited Investors
the Common Stock of the YXZ Pharmaceutical Corporation, listed on the NYSE, is likely to be subject to: - Business Risk - Credit Risk - Liquidity Risk - Regulatory Risk
Business risk & Regulatory Risk
Under what circumstances will a dilution of equity occur?
Conversion of convertible bonds into common stocks.
As current interest rates go up, the market price of existing corporate bonds bearing lower interest rates will
decrease
A customer purchases 100 shares of SNP at $38. At the time of the purchase, the PE ration was 12. Approx. what are the earnings per share of SNP?
$3.20
An investment of $1000 made 10 years ago is now worth $4000. Using the Rule of 72, the approximate compounded annual rate of return is
14.4 %
Which of the following must be considered in evaluating the suitability of a DPP investment for a customer? - Risk Tolerance - Other holdings - Financial Situation - Age
All of them
Lowering the tax basis of an asset & then selling the asset for more that the tax basis & the excess is then subject to tax
Depreciation Recapture
The prospectus for a fund states that the minimum initial investment is $500,000, This is most likely what time of fund?
Hedge fund
The potential for an investor to be adversely affected by changes in investment or tax laws.
Legislative Risk
Which of the Industry's performance is least likely to track the business cycle?
Pharmaceuticals
Uncertainty resulting from the possibility that the value of an investment will be affected by a change in the law is known as
Legislative risk
risk associated with the inability to liquidate a security quickly and at a fair market price
Liquidity risk
A portfolio manager with a growth style would probably diversify by:
Placing a portion of the portfolio into high-yield bonds
All of the following actions will increase the Deficit in the U.S. balance of payments EXCEPT: - Americans buying Japanese cars - investments by US firms abroad - US Foreign Aid - Purchase by foreigners of US securities
Purchase of US securities
Which two are most associated with a Treasury Bond? - Credit risk - Liquidity risk - Reinvestment risk - Interest Rate risk
Reinvestment Risk & Interest Rate Risk
Amount that can be subtracted from a tax liability, such as an energy conservation/research and development; dollar for dollar
Tax Credit
You recently took a trip to Warsaw, Poland and when you received your credit card statement, you noticed that your vodka purchase for 100 polish Zlotys resulted in a $30 charge on your statement. Based on this exchange rate, each dollar was worth approx.
3.33 Zlotys
Among the Effects of a country devaluation its currency is that there will probably be: - A Credit to that nation's trade account balance - A debit to that nation's trade account balance - An increase in that nation's exports - An increase in that nations imports
A Credit to trade account balance & An increase in exports
Which of the following securities are the most interest-rate sensitive? - Utility Stocks - Growth Stocks - Preferred Stocks - Common Stocks
Utility Stocks & Preferred Stocks
