INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
FIN630
Quiz:
1) Which of the following types of orders would normally have the most rapid execution?
a) Market order
b) Limit order
c) Good-till-canceled order
d) Stop order
2) Which of the following statements regarding short sales is not true?
a) Short sales are done with the expectation that prices will rise.
b) Short sales can be executed only on an uptrend.
c) Short sales are all done on margin.
d) Short sales may be executed by both individuals and market makers.
3) The price at which a security dealer sells a security is known as:
a) Bid Price
b) Offer Price
c) Market Price
d) Order Price
4) More investors may be using technical analysis now than in earlier periods because:
a) There is now more empirical evidence supporting technical analysis.
b) The Internet makes more data available to track stock prices.
c) More investors are able to understand the quantitative calculations of technical
analysis.
d) More business schools are now teaching technical analysis.
5) Which of the following is true regarding the Dow Theory?
a) The Dow Theory was developed by the publisher of Forbes magazine.
b) The Dow Theory is primarily a fundamental analysis tool.
c) The Dow Theory identified three movements in security prices.
d) Dow Theory is a notion that computer algorithms can be taught to look for
optimum patterns.
6) Which of the following would be considered the most bullish indicator?
a) A price increase
b) A price increase with small volume
c) A price increase on heavy trading
d) No change in price but an increase in volume
7) Which are the two ratio areas that are of the greatest concern to stockholders?
a) Liquidity and profitability
b) Liquidity and leverage
c) Profitability and activity
d) Profitability and leverage
8) When might a high return on equity not be desirable?
a) If the firm were not able to sustain the high return on equity
b) If the firm were in the rapid growth cycle of the life cycle
c) If the firm had a large amount of debt financing
d) If the firm did not have as high a return on assets
9) In order for any dividend valuation model to reflect a valid stock price for a company,
a) The company must pay dividends
b) The dividend growth rate must remain constant.
c) The required rate of return (discount rate) must remain constant.
d) The company should pay interim dividend.
10) Which type of order is often used by investors who have bought a security and want
to protect themselves from a falling price?
a) Market order
b) Limit order
c) Stop order
d) Good-till-canceled order
