Brand Exam Questions Flashcards
Kirsten is considering a short-term money market fund. She should be aware that these funds have a weighted average maturity of no more than
A. 6 months.
B. 3 months.
C. 90 days.
D. 60 days.
D
Harry is interested in money market funds. Which of the following types of risk should he be particularly aware of?
A. Event risk.
B. Interest rate risk.
C. Systematic risk.
D. Diversification risk.
B
Madeline has invested in a number of different gilts. Within the title of each one she can expect to find the
A. risk rating.
B. coupon payment dates.
C. interest payment dates.
D. gross redemption yield.
B
Where investors demand higher yields for holding longer-term bonds the yield curve is said to be
A. normal.
B. flat.
C. inverted.
D. reversed.
A
Susan has invested in the following four gilts. Which gives her the highest running yield?
A. Gilt 1
B. Gilt 2
C. Gilt 3
D. Gilt 4
Gilt | Price | Coupon |
|——|——–|——–|
| 1 | 109.2 | 4.2% |
| 2 | 111.4 | 4.8% |
| 3 | 123.8 | 5.2% |
| 4 | 119.6 | 5% |
B
When the purchaser of fixed interest investment receives the full six months’ interest, even though the stock was owned for less than the entire period, this is referred to as being purchased
A. ex-dividend.
B. cum dividend.
C. plus dividend.
D. without dividend.
B
Shelley is invested in a range of corporate bonds and gilts. When comparing them we can say that
A. corporate bonds are regarded as lower risk than gilts.
B. the spread between the buying and selling price is wider for corporate bonds.
C. gilt prices are more volatile than corporate bond prices.
D. gilt yields are generally higher than corporate bonds.
B
A client is considering investing in an offshore bank account. Which of the following is regarded as a common danger specific to investing in offshore accounts?
A. Reduced compensation schemes.
B. Interest rate risk.
C. Higher taxation rates.
D. Reinvestment risk.
A
The directors of Harvest PLC have decided to reduce dividend payments. This was unexpected. In terms of the likely effect of this on their share price, you would expect
A. no effect on their share price.
B. an increase in their share price.
C. a decrease in share prices in their sector.
D. a decrease in their share price.
D
Billy has been offered non-voting ordinary shares in a UK company. He should be aware that
A. he will rank behind ordinary shareholders in the event of liquidation.
B. he will not qualify for a dividend until the dividend on the ordinary shares has reached a pre-determined level.
C. he will be entitled to a smaller proportion of profits than ordinary shareholders.
D. the market price will usually be lower than that of the ordinary shares.
D
These two company shares sit in the same sector. From the information given we can make the general comment that
A. share A is overpriced.
B. share B is under-priced.
C. share A will provide better returns than B.
D. share B is expected to grow more than Share A.
| Share A | Share B |
|———|———|———|
| Price | 210p | 190p |
| EPS | 29p | 23p |
D
Yellowstone’s accounts show that dividends paid to ordinary shareholders over the last 12 months was £315,000 whilst dividends paid to preference shareholders was £175,000. Their profit after taxation was £1,114,000. What is their dividend cover?
A. 3.54 times.
B. 2.98 times.
C. 1.98 times.
D. 1.63 times.
B
Brynwold Accounts at year end contain the following information
Total assets £14,150 Current liabilities £2,120 Long-term debt £1,140 Ordinary shares in issue 5,750 Preference shares in issue 1,500 What is Brynwold’s net asset value? A. £1.89 B. £1.63 C. £1.50 D. £2.40
B
The FTSE 100 is an arithmetically weighted index based on
A. size of the company.
B. share price movements.
C. number of shares of company.
D. market capitalisation of each company.
D
Do the following exam questions
A
A
A
D
B
C
CD
ACD
AB
ABC
AB
AD
BDE
BC
AD
AB
BD
