Question 1

In order to predict an industry price-earnings ratio,the following estimate(s)is/are needed:

Accepted Answer

A)  industiy dividend payout ratio 
B)  industiy required rate of return 
C)  industry growth rate 
D)  all of the above 
A)  industiy dividend payout ratio 
B)  industiy required rate of return 
C)  industry growth rate 
D)  all of the above

Question 2

If the ICAPM beta is 1.2,and the world market return and risk-free rates are 14% and 6% respectively,then the expected return predicted by the ICAPM is:

Accepted Answer

A)  $ 12.0\% $ 
B)  $ 14.8 \% $ 
C)  $ 15.6 \% $ 
D)  $ 16.4 \% $ 
A)  $ 12.0\% $ 
B)  $ 14.8 \% $ 
C)  $ 15.6 \% $ 
D)  $ 16.4 \% $

Question 3

Supply side economics tends to focus on _______________.

Accepted Answer

A) government spending 
B) price controls 
C) monetary policy 
D) increasing productive capacity 
A) government spending 
B) price controls 
C) monetary policy 
D) increasing productive capacity

Question 4

Given an earnings per share figure for the All-Ordinaries of 357 and a price-earnings ratio of 18,what is the price of the All-Ordinaries?

Accepted Answer

A)   19.83 
B)  30.74 
C)  6426
D 13554 
A)   19.83 
B)  30.74 
C)  6426
D 13554

Question 5

Which one of the following is probably the most direct and immediate way to stimulate or slow the economy,although it is not very useful for fine-tuning economic performance?

Accepted Answer

A) Fiscal policy 
B) Monetary policy 
C) Supply-side policy 
D) Rising minimum wages 
A) Fiscal policy 
B) Monetary policy 
C) Supply-side policy 
D) Rising minimum wages

Question 6

It is generally argued that when pricing equities inflation risk is __________ it is for pricing bonds.

Accepted Answer

A)  not as important as 
B)  more important than 
C)  equally important as 
D)  more difficult than 
A)  not as important as 
B)  more important than 
C)  equally important as 
D)  more difficult than

Question 7

In studies of the predictability of GDP using the term structure by Harvey (1988),an upward sloping yield curve suggests future economic growth.

Accepted Answer

A) True 
 B)False

Question 8

Companies that are little affected by the business cycle,exhibiting reasonably stable performance independent of the level of economic activity are called:

Accepted Answer

A)  cyclical companies 
B)  offensive companies 
C)  defensive companies 
D)  growth companies 
A)  cyclical companies 
B)  offensive companies 
C)  defensive companies 
D)  growth companies

Question 9

The study by Reilly,Griggs and Wong (1983)provides evidence that past EPS growth is a good predictor of future EPS growth.

Accepted Answer

A) True 
 B)False

Question 10

Given a nominal interest rate of 6.75% and a real rate of return of 4%,what is the expected rate of inflation?

Accepted Answer

A)  $ 1.67 \% $ 
B)  $ 2.14 \% $ 
C)  $ 2.26 \% $ 
D)  $ 2.64 \% $ 
A)  $ 1.67 \% $ 
B)  $ 2.14 \% $ 
C)  $ 2.26 \% $ 
D)  $ 2.64 \% $

Question 11

The goal of supply side policies is to _______.

Accepted Answer

A) increase government involvement in the economy 
B) create an environment where workers and owners of capital have the maximum incentive and ability to produce and develop goods 
C) maximise tax revenues of the government 
D) focus more on wealth redistribution policies 
A) increase government involvement in the economy 
B) create an environment where workers and owners of capital have the maximum incentive and ability to produce and develop goods 
C) maximise tax revenues of the government 
D) focus more on wealth redistribution policies

Question 12

Mature growth is the __________ stage in the industry life cycle.

Accepted Answer

A)  stable 
B)  third 
C)  expansion 
D)  last 
A)  stable 
B)  third 
C)  expansion 
D)  last

Question 13

An indexed-linked bond is one where the price is linked to the:

Accepted Answer

A) All-Ordinaries 
B) Consumer Price Index 
C) world equity market index 
D) industrial production index 
A) All-Ordinaries 
B) Consumer Price Index 
C) world equity market index 
D) industrial production index

Question 14

The investment approach where the analyst attempts to identify mispriced securities first and then construct a portfolio based on those securities is known as:

Accepted Answer

A)  the top-down approach 
B)  the industry approach 
C)  fundamental analysis 
D)  the bottom-up approach 
A)  the top-down approach 
B)  the industry approach 
C)  fundamental analysis 
D)  the bottom-up approach

Question 15

The investment strategy of Siegel (1991)suggests that investors can profit by:

Accepted Answer

A)  buying equities before a trough and bonds before a peaks 
B)  buying bonds before a trough 
C)  buying equities after a trough and bonds after a peak 
D)  buying equities after a trough and bonds before a peak 
A)  buying equities before a trough and bonds before a peaks 
B)  buying bonds before a trough 
C)  buying equities after a trough and bonds after a peak 
D)  buying equities after a trough and bonds before a peak

Question 16

Layton (1994)models the Australian economy as a combination of periods of 'normal' and 'sluggish' growth.

Accepted Answer

A) True 
 B)False

Question 17

The demand side of an economy relates to government fiscal policy and government monetary policy.

Accepted Answer

A) True 
 B)False

Question 18

When modelling the industry earnings per share forecast,the main modelling problem lies in the prediction of:

Accepted Answer

A)  industiy classification 
B)  industry sales 
C)  industry capital structure 
D)  all of the above 
A)  industiy classification 
B)  industry sales 
C)  industry capital structure 
D)  all of the above

Question 19

Assume a bond with a face value of $100 000 pays semi-annual coupons of 6% p.a.in perpetuity.This bond has a discount rate of 8% p.a.What is the price of the bond?

Accepted Answer

A)  $ \$ 37500 $ 
B)  $ \$ 75000 $ 
C)  $ \$ 100000 $ 
D)  $ \$ 150000 $ 
A)  $ \$ 37500 $ 
B)  $ \$ 75000 $ 
C)  $ \$ 100000 $ 
D)  $ \$ 150000 $

Question 20

If interest rates increase,business investment expenditures are likely to __________ and consumer durable expenditures are likely to _________.

Accepted Answer

A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease 
A) increase;increase 
B) increase;decrease 
C) decrease;increase 
D) decrease;decrease

In order to predict an industry price-earnings ratio,the following estimate(s)is/are needed:

If the ICAPM beta is 1.2,and the world market return and risk-free rates are 14% and 6% respectively,then the expected return predicted by the ICAPM is:

Supply side economics tends to focus on _______________.

Given an earnings per share figure for the All-Ordinaries of 357 and a price-earnings ratio of 18,what is the price of the All-Ordinaries?

Which one of the following is probably the most direct and immediate way to stimulate or slow the economy,although it is not very useful for fine-tuning economic performance?

It is generally argued that when pricing equities inflation risk is __________ it is for pricing bonds.

In studies of the predictability of GDP using the term structure by Harvey (1988),an upward sloping yield curve suggests future economic growth.

Companies that are little affected by the business cycle,exhibiting reasonably stable performance independent of the level of economic activity are called:

The study by Reilly,Griggs and Wong (1983)provides evidence that past EPS growth is a good predictor of future EPS growth.

Given a nominal interest rate of 6.75% and a real rate of return of 4%,what is the expected rate of inflation?

The goal of supply side policies is to _______.

Mature growth is the __________ stage in the industry life cycle.

An indexed-linked bond is one where the price is linked to the:

The investment approach where the analyst attempts to identify mispriced securities first and then construct a portfolio based on those securities is known as:

The investment strategy of Siegel (1991)suggests that investors can profit by:

Layton (1994)models the Australian economy as a combination of periods of 'normal' and 'sluggish' growth.

The demand side of an economy relates to government fiscal policy and government monetary policy.

When modelling the industry earnings per share forecast,the main modelling problem lies in the prediction of:

Assume a bond with a face value of $100 000 pays semi-annual coupons of 6% p.a.in perpetuity.This bond has a discount rate of 8% p.a.What is the price of the bond?

If interest rates increase,business investment expenditures are likely to __ and consumer durable expenditures are likely to _.

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Qualitative Stock Selection

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

Exam 12: Macro- and Industry Analysis of Share Markets

In order to predict an industry price-earnings ratio,the following estimate(s)is/are needed:

If the ICAPM beta is 1.2,and the world market return and risk-free rates are 14% and 6% respectively,then the expected return predicted by the ICAPM is:

Supply side economics tends to focus on _______________.

Given an earnings per share figure for the All-Ordinaries of 357 and a price-earnings ratio of 18,what is the price of the All-Ordinaries?

Which one of the following is probably the most direct and immediate way to stimulate or slow the economy,although it is not very useful for fine-tuning economic performance?

It is generally argued that when pricing equities inflation risk is __________ it is for pricing bonds.

In studies of the predictability of GDP using the term structure by Harvey (1988),an upward sloping yield curve suggests future economic growth.

Companies that are little affected by the business cycle,exhibiting reasonably stable performance independent of the level of economic activity are called:

The study by Reilly,Griggs and Wong (1983)provides evidence that past EPS growth is a good predictor of future EPS growth.

Given a nominal interest rate of 6.75% and a real rate of return of 4%,what is the expected rate of inflation?

The goal of supply side policies is to _______.

Mature growth is the __________ stage in the industry life cycle.

An indexed-linked bond is one where the price is linked to the:

The investment approach where the analyst attempts to identify mispriced securities first and then construct a portfolio based on those securities is known as:

The investment strategy of Siegel (1991)suggests that investors can profit by:

Layton (1994)models the Australian economy as a combination of periods of 'normal' and 'sluggish' growth.

The demand side of an economy relates to government fiscal policy and government monetary policy.

When modelling the industry earnings per share forecast,the main modelling problem lies in the prediction of:

Assume a bond with a face value of $100 000 pays semi-annual coupons of 6% p.a.in perpetuity.This bond has a discount rate of 8% p.a.What is the price of the bond?

If interest rates increase,business investment expenditures are likely to __________ and consumer durable expenditures are likely to _________.

The Investment Decision

Australian Financial Markets

The International Investment Environment

Financial Management: Derivative Instruments and Information Sources

Money Market Securities

Bonds

Investor Preferences and Portfolio Concepts

Risky Asset Pricing Models and the Capm

Alternative Risky Asset Pricing Models

Concepts and Applications of Market Efficiency

Equity Valuation Models

Qualitative Stock Selection

Quantitative Company Analysis

Futures and Forward Contracts

Option Contracts

Advanced Issues in Options

Alternative Investments

Portfolio Management

Performance Evaluation of Managed Funds

Filters

If interest rates increase,business investment expenditures are likely to __ and consumer durable expenditures are likely to _.