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Chapter 6
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Questions in this quiz (17)
1A company's Market Value Added equates to the market assessment of the present value of
the company's future:- Adividend distributions
- Beconomic value added
- Ccapital costs
- Dgross profits
2If the real annual returns of a UK equity investment are normally distributed around the mean
return of 8% with a standard deviation of 4.5% approximately two-thirds of the returns
recorded will be within what range?- A-5.5% and 21.5%
- B-1% and 17%
- C3.5% and 12.5%
- D5.75% and 10.25%
3When considering the money supply, money is accurately described as anything that is
generally:- Aconvertible to sterling currency
- Bacceptable as a means of settling a debt
- Csustainable in value over a defined period
- Dtradable and held outside of a bank or building society deposit
4Which of the following is a fiscal policy used to stimulate the economy?
- ARaising interest rates
- BCutting interest rates
- CRaising personal taxes
- DCutting personal taxes
5Two sets of data are positively correlated. If one set of data rises in value, what will happen to
the other set?- ARises
- BFalls
- CNo change
- DRises to begin with then falls
6What differentiates Gross Domestic Product (GDP) and Gross National Product (GNP)?
- AA Indirect taxes, depreciation and net exports
- BIndirect taxes and depreciation
- CDepreciation and property income
- DNet property income
7A function of the Monetary Policy Committee is to:
- Aattempt to control inflation by setting the base rate
- Bintervene in the financial markets to control money supply
- Cmaintain confidence in the UK financial system
- Dpromote public understanding of inflation
8 The demand curve for a particular product will be horizontal where the supplying firm operates
in:- Aa perfect competitive market
- Ba monopolistic market
- Ca sector generating excessive profits
- Da sector generating minimal profits
9The annual return of a portfolio in each of the last six years has been 8.2%, 3.6%, 5.1%, 2.1%,
9.4% and 4.7%. What is the arithmetic mean return?- A4.2%
- B4.9%
- C5.5%
- D5.8%
10A company's p/e ratio recently changed from 12 to 15. This normally indicates that:
- Athe share value has fallen
- Bgrowth expectations have improved
- Cdividend levels have become less stable
- Dthe relevant market sector is in decline
11Which of the following is MOST LIKELY to be a factor causing market movement?
- ASentiment
- BSupply and demand
- CEconomic and political strategy
- DInvestor psychology
12The Liquidity (Acid Test) ratio measures a company's ability to:
- Aincrease its current assets
- Bmeet its current liabilities
- Cincrease its inventory turnover
- Dpay its non-current liabilities
13In a two-stock portfolio which of the following correlations would normally offer the greatest
level of diversification?- A0.8
- B0.6
- C-0.4
- D-0.7
14In technical analysis, the term, 'primary movement' refers to which of the following?
- AShort-term share price trend
- BLong-term share price trend
- CShort-term dividend policy
- DLong-term dividend policy
15The difference between a nominal rate of return and a real rate of return relates solely to the
effects of- Ataxation
- Bcharges
- Cinflation
- Dcompounding
16Which of the following is NOT counted as part of the Current Account Balance?
- AImported and exported goods
- BDividends on UK holdings of overseas assets
- CLong-term capital flows
- DInterest on UK holdings of overseas assets
17If $2,200 is invested for four years with interest at the rate of 6% p.a., compounded half-yearly,
what will be the value at the end of this period?- A$2,696.55
- B$2,777.45
- C$2,786.89
- D$2,860.77
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- User has deleted their subject information Quiz on Chapter 6, created by Deleted user on 03/09/2021.
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