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Question 1

Vad är Soft Dollars?

Answer 1

D

Question 2

Which of the following cannot be used by investors to pursure a social Agenda?
A, Investment Policy Statement (IPS) Screen
B, Socially Responsible Investing (SRI) Screen
C, Divestment
D, Both A and B

Answer 2

A

Question 3

The primary function of investment banks is to:
A. Extend credit to stock brockers and dealers
B, Extend credit to investors
C, Exten Credit to corporations
D, Help corporations issue new securities

Answer 3

D

Question 4

When those most likely ot produce the outcome insured against are the ones who purchase insurance, insurance companies are said to face the problem of:
A. Fraudulent claims
B, Moral Hazard
C, Adverse selection
D, Precuniary purchases

Answer 4

C

Question 5

To prevent moral hazard problem, health and life insurance companies may write policies:
A, That increase benefits dramatically once the policyholder is discovered to have contracted an illness so that the patient can recover sooner
B, Containing provisions which either reduce or eliminate benefits to persons who contract pre-specified illnesses
C, Boosting the amount the companies will pay health providers in the event that claims are submitted by policyholders
D, With only A and B

Answer 5

B

Question 6

Insurance companies' attempts to minimize adverse selection and moral hazard. Explain which of the followin insurance practices?
A, Risk-assessment screening
B, Risk-based premiums
C, Restrictive provisions
D, All of the above
E, Only a and B

Answer 6

D

Question 7

Which of the following executive compensations is not conditional on the performance of a firm?
A, Stock options
B, Salaries
C, Pensions
D, Golden parachutes

Answer 7

D

Question 8

Thie higher the bank liability, 
A, the same is its ROE
B, The higher is its ROE
C, The lower is its ROE
D, none of the above

Answer 8

Inte B, kan det vara D då ROE beräknas annorlunda för banker?

Question 9

____ perfor their main function in the primary market for securities and ____ perform their main function in the secondary market:
A, Investment banks; Securities brokers and dealers
B, Securities brokers and dealers ; investment banks
C, Securities broers; securities dealers
D, Securities dealers; securities brokers

Answer 9

A

Question 10

The largets share of life insurance companies' assets are\_\_\_\_
A, corporate stock
B, Corporate bonds
C, Government securities
D, Cash reservers

Answer 10

B

Question 11

And instruction to a securities agent to sell a stock when it reaches a sepcific price is a \_\_ 
A, Short sell
B, market order
C, limit order
D, Stop loss order

Answer 11

D

Question 12

A \_\_\_\_ is a speacialized firm that finances young, start-up companies:
A, Venture capital firm
B, finance company
C, small-business finance company
D, capital-creation company

Answer 12

A

Question 13

Of the following financial intermediaries, which holds the least liquid assets?
A, property and casualty insurance companies
B, life insurance companies
C, Money Market mutual funds
D, commercial banks

Answer 13

B

Question 14

Bank loans from the Federal Reserve are called \_\_\_\_ and represent a \_\_\_ of funds.
A, Discount loans: use
B, Discount Loans; source
C, Fed fund, use
D, fed funds; source

Answer 14

B

Question 15

When $1 million is deposited at a bank, the required reserve ratio is 20 percent, and the bank chooses not to hold any excess reserves but instead makes loans, then in the bank’s final balance sheet, :
A, the assets at the bank increase by 200 000$
B, the liabilities of the bank increase by $200 000
C, reserves increase by $200 000
C, all of the above occur

Answer 15

C

Question 16

Which of the following statements is FALSE?
A, the relationship between the time to maturity and the interested rate is called the term structure of interest rates
B, The yield curve is a potential leading indicator of future economic growth
C, The real interest rate indicate teh rate at which your moey will grow if invested
for a certain period
D, The shape of the yield curve will be strongly influenced by interest rate expectations

Answer 16

Inte A

Question 17

Which is the correct definition of “Soft Dollars?
A, It is the practice of money managers providing research and other product and services to brokerage firms along with the payment of brokerage commissions by the money manager’s clients
B, It is the practice of money managers’ clients providing research and other product and services to brokerage firms along with the payment of brokerage commissions by the money managers
C, It is the practice of brokerage firms providing research and other product and services to money managers along with the payment of brokerage commissions by the money managers’ clients
D, It is the practice of money managers’ clients providing research and other product and services to brokerage firms along with the payment of brokerage commissions by the money managers

Answer 17

C

Question 18

A company's pension plan promises employees a specific proportion of income when they retire. However, the plan does not have the assets to meet these future obligations to employees. This plan represent a defined \_\_\_ plan that is \_\_\_\_
A, Contribution; underfunded
B, benefit; Overfunded
C, Benefit; underfunded
D, contribution; overfunded

Answer 18

C

Question 19

Because of the lemons problem in the used car market, the average quality of the used cars offered for sale will be \_\_\_\_, which gives rise to the problem of \_\_\_\_
A, low; moral hazard
B. high; moral hazard
C, low, Adverse selection¨
D, high; adverse selection

Answer 19

C

Question 20

Which of the following statements is FALSE?
A, one advantage of quoting the yield to maturity rather than the price is that the yield is independent of the face value of the bond
B, As we can convert any bond price into a yield, and vice versa, bond prices and yields are often used interchangeably
C, Unlike the case of bonds that pay coupons, for zero-coupon bonds, there is no simple formula to solve for the yield to maturity directly
D, The IRR of an investment in a bond is given a sepcial name, the yield to maturity (YTM)

Answer 20

Inte AC

Question 21

If the market price is 89.60 kr, the yield to maturity for the two year zero-Coupon bond is closest to:
A, 6%
B, 5,8%
C, 5,6%
D, 5,5%

Answer 21

C

Question 22

Which of the following statements is FALSE?
A, We should use the general dividend discount model to value the stock of a firm with rapid or changing growth
B, As firms mature, their growth slows to rated more typical of established companies
C, The dividend discount model values the stock based on a forecast of the future dividends paid to shareholders
D, The simplest forecast for the firm’s future dividends states that they will grow at a constant, g, forever

Answer 22

A

Question 23

Which of the following statements is FALSE?
A, The standard deviation is the square root of the variance
B, Because investors dislike only negative resolutions of uncertainty, alternative measures that focus solely on downside risk have been developed, sucha s the semi-variance and the expected tail loss
C, While the variance and the standard deviation both measure the variability of the returns, the variance is easier to interpret because it is in the same units as the returns themselves
D, While the variance and the standard deviation are the most common measures of risk, they do not differentiate between upside and downside risk

Answer 23

C

Question 24

Why does falling interest rates create a problem for Life insurerers?
A, The rating of their bonds will fall
B, The time-to-maturity of their assets relative to their liabilities is too high
C, The time-to-maturity of their assets relative to their liabilities is too low
D, The will have to distribute the bonus rate earlier

Answer 24

C

Question 25

Suppose an investment is equally likely to have a 35% return of a -20% return. The variance on the return for this investment is closest to:
A, 0,151
B, 0,0378
C, 0,075
D, 0

Answer 25

C