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Investment Environment

Total questions: 20

Worksheet time: 20mins

Name
Class
Date
1.

A good characteristic of financial market

a)

Buyers anywhere

b)

Price continuity

c)

Sellers here and there

d)

Cheap assets

2.

Usable money market instrument during war time and deflation

a)

Bankers acceptance

b)

Repurchase agreement

c)

Eurodollars

d)

T-bills

3.

Holder of short term Islamic money market instrument would likely get...?

a)

Principal plus interest

b)

Principal plus sadaqah

c)

Principal plus zakat

d)

Principal plus hibah

4.

Sales of existing shares with no new issuance in primary market.

a)

Public offerings

b)

Private placement

c)

Offer for sale

d)

Public issue

5.

An order at a specified price within a period until cancelled

a)

Stop loss order

b)

Limit order

c)

Market order

d)

GTC order

6.

Disadvantage of over the counter (OTC) contract

a)

Opaque dealing

b)

Customized contract

c)

Involved participants

d)

Direct contract

7.

Common market makers

a)

Speculators

b)

Regulators

c)

Brokerage houses

d)

Investors

8.

The following is not the cost of trading in stock market:

a)

Clearing fees

b)

Brokerage fees

c)

Stamp duty

d)

Trustee fees

9.

Adding leverage to existing investment

a)

Insider trading

b)

Margin trading

c)

Short selling

d)

Intraday selling

10.

Why is a developed capital market essential?

a)

Reduces inflation

b)

Eradicate corruption

c)

Generates productivity

d)

Support local Malaysian products

11.

Formerly known as MESDAQ market

a)

Main market

b)

ACE market

c)

LEAP market

d)

PN17

12.

Bursa Malaysia Shariah benchmark index

a)

FTSE Bursa Malaysia KLCI

b)

FTSE Bursa Malaysia Mid 70 Index

c)

FTSE Bursa Malaysia EMAS Index

d)

FTSE Bursa Malaysia EMAS Shariah Index

13.

The following are the importance of secondary market trading EXCEPT

a)

Publicity

b)

Liquidity

c)

Firm profitability

d)

Price continuity

14.

What is the notion behind margin trading?

a)

Financing

b)

Leveraging

c)

Short selling

d)

Investing

15.

Why does lead underwriter deserve bragging rights in primary issues?

a)

Publicity and prestige

b)

Revenues increase

c)

Huge fees

d)

beauty pageant

16.

3-year returns for tophat are 2.5%, 3% and 1.5% whereas market returns are 2.75%, 1.8% and 1.75%. Solve for CWI.

a)

1.027

b)

1.077

c)

1.057

d)

1.072

17.

FTSE Hijrah Shariah yielded a set of return of 13.2%, -8.33%, 24.5%, 22.2%, -15.5%, and 5.8% over 6 years period. Calculate the arithmetic mean return.

a)

6%

b)

6.98%

c)

9.86%

d)

8.69%

18.

A stock purchased at $30 and sold for $37.53 received a dividend of $0.25 per share. Compute the return if Mikael own 50 shares.

a)

39.22%

b)

29.33%

c)

25.93%

d)

32.59%

19.

If a stock is currently priced at $0.15, what would be the target price assuming you expect to gain 400% return? No dividend has been distributed.

a)

$0.30

b)

$0.45

c)

$0.60

d)

$0.75

20.

A $1,000 investment put into a high-interest savings account with a variable interest rate. With no additional contributions, six years later, the account balance amounts to $1,159. Compute the annualized rate of return.

a)

2.8%

b)

2.5%

c)

2.9%

d)

2.3%