$ \quad $$ \quad $$ \quad $$ \quad $$ \quad $$ \quad $$ \quad $$\text { ABC Limited: Order book }$ $\begin{array}{l} \begin{array}{|c|c|r|r|} \hline \begin{array}{c} \text { Price } \\ \text { (to buy) } \end{array} & \begin{array}{c} \text { Quantity } \\ \text { (to buy) } \end{array} & \begin{array}{c} \text { Price } \\ \text { (to sell) } \end{array} & \begin{array}{c} \text { Quantity } \\ \text { (to sell) } \end{array} \\ \hline \$ 1.00 & 50000 & \$ 1.10 & 25000 \\ \hline \$ 0.90 & 25000 & \$ 1.20 & 50000 \\ \hline \$ 0.80 & 50000 & \$ 1.30 & 100000 \\ \hline \end{array} \end{array}$ -Given the order book for ABC Limited,suppose a limit order arrives to buy 1000 shares at $1.05.At what price will the trade occur? (Assume no new orders arrive after the limit order. )

A) $\$ 0.80$ B) $\$ 1.00$ C) $\$1.10$ D) $\text { IJncertain as nn trade will nccun }$ A) $\$ 0.80$ B) $\$ 1.00$ C) $\$1.10$ D) $\text { IJncertain as nn trade will nccun }$

$\begin{array}{|c|c|c|} \hline \text { Day } & \begin{array}{c} \text { BHP price } \\ \text { (end of day) } \end{array} & \begin{array}{c} \text { ANZ price } \\ \text { (end of day) } \end{array} \\ \hline \text { Monday } & \$ 18.20 & \$ 24.50 \\ \hline \text { Tuesday } & \$ 19.00 & \$ 24.80 \\ \hline \text { Wednesday } & \$ 17.80 & \$ 25.90 \\ \hline \text { Thursday } & \$ 16.55 & \$ 26.00 \\ \hline \end{array}$ -Consider the end of day prices for ANZ and BHP for Monday through Thursday.Suppose an investor short sells BHP and buys ANZ,what will the continuously compounded return be on the investor's combined position if the investments have equal weight?

A) $-3.56 \%$ B) $3.56 \%$ C) $7.72 \%$ D) $15.44 \%$ A) $-3.56 \%$ B) $3.56 \%$ C) $7.72 \%$ D) $15.44 \%$

Exam 2: Australian Financial Markets

Cruiser Ltd has 3 000 000 shares on issue.The company makes a rights issue on the basis of one share for every six already held.The subscription price for a new share is $3.20 per share.The current market value of the company's shares is $4.00.What would be the ex-rights share price?

Free

(Multiple Choice)

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Question 1

Correct Answer:

Verified

C

Trading on the Australian stock exchange is conducted on the SEATS system.

Free

(True/False)

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Question 2

Correct Answer:

Verified

False

A margin call occurs when the value of the borrowed money as a proportion of the portfolio value is too high.This ratio is typically known as the value to loan ratio.

Free

(True/False)

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(67)

Question 3

Correct Answer:

Verified

False

According to ASX short-selling rules,all short-sold positions must be settled within three days.

(True/False)

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Question 4

$\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\quad$ $\text { ABC Limited: Order book }$ Price (to buy) Quantity (to buy) Price (to sell) Quantity (to sell) \ 1.00 50000 \ 1.10 25000 \ 0.90 25000 \ 1.20 50000 \ 0.80 50000 \ 1.30 100000 -Given the order book for ABC Limited,suppose a limit order arrives to buy 1000 shares at $1.05.At what price will the trade occur? (Assume no new orders arrive after the limit order. )

(Multiple Choice)

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Question 5

The broadest index in the Australian equity market is the:

(Multiple Choice)

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Question 6

Day BHP price (end of day) ANZ price (end of day) Monday \ 18.20 \ 24.50 Tuesday \ 19.00 \ 24.80 Wednesday \ 17.80 \ 25.90 Thursday \ 16.55 \ 26.00 -Consider the end of day prices for ANZ and BHP for Monday through Thursday.Suppose an investor short sells BHP and buys ANZ,what will the continuously compounded return be on the investor's combined position if the investments have equal weight?

(Multiple Choice)

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Question 7

are traded in the ASX 24 system.

(Multiple Choice)

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Question 8

Taxman Ltd currently has 4 500 000 shares on issue.Taxman Ltd makes a bonus issue on the basis of one share for every five shares currently held.Before the bonus issue,the company's shares trade at $8.50.What would be the expected ex-bonus price?

(Multiple Choice)

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Question 9

Which of the following bodies is responsible for the supervision of financial markets in Australia like ASX and ASX 24?

(Multiple Choice)

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Question 10

In Australia,the main organized securities markets available to investors included:

(Multiple Choice)

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Question 11

An accumulation index differs from a price index because it assumes that dividends are reinvested back into the stock.

(True/False)

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Question 12

The S&P/ASX 50 is the narrowest of the S&P/ASX indices.

(True/False)

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Question 13

Which of the following represent(s)the way in which Australian debt instruments are taxed differently from Australian equity instruments?

(Multiple Choice)

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Question 14

Both LICs and LITs are closed end vehicles,though LICs distribute dividends.

(True/False)

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Question 15

Taxman Ltd currently has 4 500 000 shares on issue.Taxman Ltd makes a bonus issue on the basis of one share for every five shares currently held.Before the bonus issue,the company's shares were trading at $8.50.What is the new share price observed in the market (i.e.assuming no adjustment is made)?

(Multiple Choice)

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Question 16

Which of the following is defined as a money market instrument that is termed a 'negotiable instrument'?

(Multiple Choice)

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Question 17

Assuming an imputation tax system with a corporate tax rate of 30%,what is the net personal tax for an investor with a personal tax rate of 15%,if the fully franked dividend is $14 000?

(Multiple Choice)

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Question 18

According to the ASX minimum price steps,which of the following represents the smallest possible positive simple return for a share with a current price of $4.00?

(Multiple Choice)

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Question 19

When constructing a residential property index,it is generally not assumed that properties:

(Multiple Choice)

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Question 20

Cruiser Ltd has 3 000 000 shares on issue.The company makes a rights issue on the basis of one share for every six already held.The subscription price for a new share is $3.20 per share.The current market value of the company's shares is $4.00.What would be the ex-rights share price?

Trading on the Australian stock exchange is conducted on the SEATS system.

A margin call occurs when the value of the borrowed money as a proportion of the portfolio value is too high.This ratio is typically known as the value to loan ratio.

According to ASX short-selling rules,all short-sold positions must be settled within three days.

The broadest index in the Australian equity market is the:

are traded in the ASX 24 system.

Taxman Ltd currently has 4 500 000 shares on issue.Taxman Ltd makes a bonus issue on the basis of one share for every five shares currently held.Before the bonus issue,the company's shares trade at $8.50.What would be the expected ex-bonus price?

Which of the following bodies is responsible for the supervision of financial markets in Australia like ASX and ASX 24?

In Australia,the main organized securities markets available to investors included:

An accumulation index differs from a price index because it assumes that dividends are reinvested back into the stock.

The S&P/ASX 50 is the narrowest of the S&P/ASX indices.

Which of the following represent(s)the way in which Australian debt instruments are taxed differently from Australian equity instruments?

Both LICs and LITs are closed end vehicles,though LICs distribute dividends.

Taxman Ltd currently has 4 500 000 shares on issue.Taxman Ltd makes a bonus issue on the basis of one share for every five shares currently held.Before the bonus issue,the company's shares were trading at $8.50.What is the new share price observed in the market (i.e.assuming no adjustment is made)?

Which of the following is defined as a money market instrument that is termed a 'negotiable instrument'?

Assuming an imputation tax system with a corporate tax rate of 30%,what is the net personal tax for an investor with a personal tax rate of 15%,if the fully franked dividend is $14 000?

According to the ASX minimum price steps,which of the following represents the smallest possible positive simple return for a share with a current price of $4.00?

When constructing a residential property index,it is generally not assumed that properties:

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