F4 Personal Finance ch4 supp ex

Macro-economic factors that affect stock prices include

• economic conditions.

• interest rates.

• political situations.

• All of the above

  
  

While not all firms in the same industry will be affected equally by an industrial factor, their stock prices tend to

• move up and down together.

• move independently.

• move up together when bad news occurs.

• stay flat no matter what happens.

Firm-specific factors are key drivers of stock prices which are related to a firm’s

(1)current and future earnings.

(2)dividends.

(3) macro-economic risk.

(4)news.

• 1,2

• 1,3

• 1,2,4

• 2,3,4

To list a stock in Hong Kong, a company must meet the listing requirements set by

• the mainland government.

• the Hong Kong Exchanges and Clearing Ltd (HKEx).

• the Hong Kong Association of Banks.

• the Hong Kong Monetary Authority.

The listing requirements of the Main Board are ______________ GEM’s

• the same as

• easier to meet than

• stricter than

• more efficient than

GEM acts as a stepping stone to the Main Board and targets companies which have ___________ but cannot meet the listing requirements of the Main Board.

• business in the mainland

• at least 500 employees

• growth potential

• bigger asset size

Companies listed on the Main Board have passed a profit or revenue test and their __________ tend(s) to be ________ than those listed on GEM.

• stock; less liquid

• stock; more profitable

• stock prices; more volatile

• stock prices; more stable

In order for investors to understand general price movements on a stock market, we need an indicator which can reflect the trend in stock prices. Such an indicator is called

• an economic entity.

• a stock market index.

• a financial option.

• a bond portfolio.

Important aspects of the HSI include

(1) Reflecting the economic performance of Hong Kong in advance.

(2) Indicating the price trends of a small percentage of listed stocks in Hong Kong.

(3) Helping investors understand general movements on the Hong Kong stock market.

(4) Reflecting a good potential to earn profit.

• 1,3

• 2,4

• 3,4

• 1,3,4

What is the advantage of holding preference shares over ordinary shares?

• Preference shareholders have voting rights.

• Preference shareholders have a higher priority in receiving dividends and capital gains.

• Preference shareholders have a higher priority in receiving dividends and claims when a company is wound up.

• Preference shareholders have a higher priority in receiving dividends and capital gains, as well as priority claims when a company is wound up.