SOAL 1

Investors seeking a diversified, professionally managed portfolio of securities can

purchase shares of

A. preferred stock.
B. convertible securities.
C. insurance policies.
D. mutual funds.

Which of the following is NOT traded in the securities markets?

A. stocks
B. bonds
C. derivatives
D. real estate

Short-term securities are bought and sold in the:

A. capital market.
B. primary market.
C. stock market.
D. money market.

Which one of the following statements concerning the primary market is correct?
A. A transaction in the primary market is between two private stockholders.
B. The first public sale of a company's stock in the primary market is called a seasoned
new issue.
C.The first public sale of a company's stock is called an IPO
D. A rights offering is a direct sale of stock to an institution that participates in the
primary market.

Which of the following is an example of a tangible asset?

A. bonds
B. mutual funds
C. stocks
D. real estate
consistent with your goals, you should consider:
A.rates of return and taxes only.
B. the pre-tax rate of return only.
C. annual dividends and taxes only.
D. risks, returns, and taxes.

Charting is the technique of

A. sorting through databases of securities to select one based on certain parameters.
B. monitoring a stock based on the underlying economic conditions.
C. plotting the performance of a security over time.
D. determining the amount of money that must be saved based on a given financial
goal.

Stock market averages and indexes are commonly used to measure

A. specific behavior of companies.
B. general behavior of stock prices.
C. specific behavior of alternative investments.
D. specific behavior of the economy.

Including foreign investments in a portfolio:

A. increases the overall risk of the portfolio.
B. reduces the potential rate of return.
C. provides potential benefits from changes in currency values.
D. limits the diversification amongst industries.

The Jakarta Islamic Index consists of 30 stocks whose price behavior

A.typically has little correlation with the rest of the stock market.
B. broadly reflects the overall price behavior of the stock market.
C. reflects the changes in value of manufacturing stocks only.
D. leads the movements in the general economy by one to two weeks.

Rational investor's are motivated to purchase an asset because of its:

A. past returns.
B. expected returns.
C. emotional benefits.
D. all of the above.
The most predictable component of stock returns is:
A. capital gains.
B. dividend income.
C. capital losses.
D. inflation adjusted return.

Kere bought a stock at a price of $22.50. She received a $1.75 dividend and sold the
stock for $26.5. What is Kere capital gain on this investment?
A. $4.00
B. $3.75
C. $2.25
D. $1.75

Amirah purchased a stock at a price of $27 a share. She received quarterly dividends
of $0.75 per share. After one year, Amirah sold the stock at a price of $29.00 a share.
What is her percentage holding period return on this investment?
A. 10.3%
B. 11.1%
((29-27)+(0.75 x 4)) : 27 x100
C. 18.5%
D. 19.4%

Ramli is going to receive a payment of $5,000 one year from today. He earns an
average of 5% on his investments. What is the present value of this payment?
A. $4,717
B. $4,762 Pv = FC (1+i) ^-n
C. $5,000 PV = 5000(1+5%)^-1
D. $5,300

Jono Has stocks of A, B, and C in his portfolio of assets. The amount of money
invested are 30%, 40% and 30%. Their betas are 1.7, 0.85, and 7.8 accordingly What
is her portfolio alpha?
What is the beta of Jono portfolio?
A. 1.04
B. 1.08
C. 1.13
D. 1.00
As gasoline prices fell in 2015, sales of hybrid and electric vehicles dropped sharply.
This is an example of:
A. Liquidity risk.
B. event risk.
C. business risk.
D. purchasing power risk.

A portfolio consisting of four stocks is expected to produce returns of -9%, 11%, 13%
and 17%, respectively, over the next four years. What is the standard deviation of
these expected returns?
A. 10.05%
B. 11.60%
C. 8.00%
D. 33.42%

The risk of a portfolio consisting of two uncorrelated assets will be

A. equal to zero.
B. greater than the risk of the least risky asset but less than the risk level of the
more risky asset.
C. greater than zero but less than the risk of the more risky asset.
D. equal to the average of the risk level of the two assets.

Which one of the following will provide the greatest international diversification?
A. directly purchasing a foreign stock
B. purchasing stock of a U.S. multinational firm
C. purchasing an ADS
D. purchasing shares of an international mutual fund

The beta of the market is

A. -1.0.
B. 0.0.
C. 1.0.
D. undefined.
The stock of ABC, Inc. has a beta of 80. The market rate of return is expected to
increase by 5%. Beta predicts that ABC stock should
A. increase in value by 6.25%.
B. increase in value by 4.0%.
C. decrease in value by 1.0%.
D. increase in value by 8%.

Which one of the following types of risk cannot be effectively eliminated through
portfolio diversification?
A. inflation risk
B. Labor problems
C. materials shortages
D. product recalls

The returns on the stock of X and Y companies over a 4 year period are shown below:
x: 8%, 12%, -5%, and 6%; while Y: 11%, 9%, -9%, and 13%. From this limited data
you should conclude that returns on
A. X and Y are negatively correlated.
B. X and Y are somewhat positively correlated.
C. X and Y are perfectly positively correlated..
D. X and Y are uncorrelated.

Maimunah owns A, B and C in her portfolio of stocks. The amount money Invested are
8,000; 12,000; and 4,000 respectively. Their Return on stock are 17,0%, 11%, and
4.30% What is the return on her portfolio?
A. 8.0%
B. 9.0%
C. 9.8%
D. 12.1%