SIE C.10.3
Speculators in foreign currencies would NOT be subject to which of the following risks? A. interest rate risk B. exchange rate risk C. market risk D. political risk
A
The Bank of England is concerned that the British Pound is weakening against the U.S. Dollar. The appropriate action for the British central bank is to: A. buy British Pounds and sell U.S. Dollars B. buy British Pounds and buy U.S. Dollars C. sell British Pounds and sell U.S. Dollars D. sell British Pounds and buy U.S. Dollars
A
Trading in the Interbank market will DIRECTLY affect all of the following EXCEPT: A. American Depositary Receipt prices in terms of U.S. dollars B. Foreign currency prices in terms of U.S. dollars C. Future trade deficit or surplus figures D. Future economic growth
A
Which index broadly measures activity in New York Stock Exchange, NYSE American (American Stock Exchange) and NASDAQ Stock Market? A. Value Line Index B. Dow Jones Averages C. Standard and Poor's 500 D. Major Market Index
A
A customer is 100% invested in an S&P 500 Index Fund. This portfolio has: A. no risk B. systematic risk C. nonsystematic risk D. credit risk
B
A fully diversified portfolio that is matched to a broad-based market index has: A. no risk B. systematic risk C. nonsystematic risk D. both systematic and nonsystematic risk
B
An investor has purchased shares of an international bond fund. The fund will have inferior performance if the value of the: A. U.S. Dollar increases and foreign currency increases B. U.S. Dollar increases and foreign currency decreases C. U.S. Dollar decreases and foreign currency increases D. U.S. Dollar decreases and foreign currency decreases
B
If the real Gross Domestic Product of the G-20 countries is growing at a faster rate than real Gross Domestic Product growth in the United States, then the value of the U.S. dollar can be expected to: A. appreciate B. depreciate C. fluctuate D. stagnate
B
A U.S. balance of payments deficit would be narrowed by which of the following? A. Increased levels of U.S. imports B. Decreased sales of U.S. securities to foreign holders C. Increased levels of foreign tourists visiting the United States D. Increased dividends paid to foreign holders of U.S. securities
C
A foreign currency trade that settles on a mutually agreed date after trade date is a: A. cash settlement B. seller's option settlement C. forward settlement D. spot settlement
C
All of the following economic events would have a negative long term impact on common stock prices EXCEPT: A. Rising interest rates B. Rising capital gains tax rates C. Rising employment rates D. Rising inflation rates
C
All of the following statements are true about the interbank market EXCEPTthe market: A. is unregulated B. responds to central bank intervention C. is located in New York City D. operates 24 hours a day
C
Foreign exchange rates are set in which market? A. First Market B. Third Market C. Interbank Market D. Equity Market
C
NYSE MARKET DIARYYesterdayPrev. DayAdvanced577827Declined19631757Unchanged455388Total Issues29952972New Highs1013New Lows9178 Based on the information presented for both days, a technical analyst would conclude that the market: A. is in a consolidation phase B. breadth indicates a strong bullish trend C. breadth indicates a strong bearish trend D. is peaking and will soon enter a downturn
C
When a security has a "low beta," this means that it moves more: A. slowly in price as compared to market interest rate changes B. rapidly in price as compared to market interest rate changes C. slowly in price as compared to overall market price changes D. rapidly in price as compared to overall market price changes
C
Which action would NOT help a client diversify his or her portfolio? A. Buying stocks of companies located in different geographic region B. Buying stocks of companies in different industries C. Buying stocks of companies on different exchanges D. Buying stocks of companies with different customer profiles
C
If a U.S. corporation has the bulk of its sales overseas, which statement is TRUE? A. Foreign currency swings would not impact the corporation since all sales would be made in the local currency of the buyer B. The corporation's products would become cheaper to foreigners as the dollar strengthens C. The corporation's sales would likely rise as the dollar strengthens D. The corporation would prefer a weak dollar
D
If the U.S. dollar appreciates against foreign currencies, which statement is TRUE? A. U.S. exports should increase and any trade deficit should narrow B. U.S. exports should increase and any trade deficit should widen C. U.S. exports should decrease and any trade deficit should narrow D. U.S. exports should decrease and any trade deficit should widen
D
The Dow Jones Averages consist of: A. 15 stocks B. 20 stocks C. 30 stocks D. 65 stocks
D
The value of both the Dow Jones and Standard and Poor's Averages would be most affected by a change in the: A. transportation stocks B. financial stocks C. utility stocks D. industrial stocks
D
