WorksheetsFINAL EXAM - FINANCIAL MARKET
Total questions: 50
Worksheet time: 31mins
Juan bought 300 shares at ₱80 each. What is the total cost?
₱18,000
₱22,500
₱24,000
₱26,000
ABC Corp. will issue stock rights at ₱25 per share, with a 1:5 ratio.
Before the announcement, the stock trades at ₱38. Compute the theoretical ex-rights price (TERP).
₱35.83
₱36.17
₱32.50
₱30.83
A college investor purchased 2,000 shares of URC at ₱130. During the year, URC paid a ₱3.50 cash dividend. At year-end, the stock price increased to ₱145. What is the total return percentage?
13.46%
14.23%
15.38%
16.15%
Globe Telecom stocks trade at ₱2,200 per share, and the company reports EPS = ₱75. Industry average P/E is 22. Based on the P/E Ratio, Globe stock is:
Overvalued because its P/E ratio is above the industry average
Undervalued because its P/E ratio is below the industry average
Correctly valued because it matches the industry average
Cannot be evaluated using P/E alone
A preferred share with a ₱100 par value pays an 8% annual dividend. The current market price is ₱88. What is the market yield, and what does it indicate?
8% — market demands no additional return
9.09% — market demands a risk premium
10.45% — market values the share at a premium
12% — market expects dividend growth
XYZ Corp. had net income of ₱22,000,000 and 10,000,000 shares outstanding. It repurchased 1,000,000 shares at year-end. What is the revised EPS?
₱2.00
₱2.20
₱2.44
₱2.75
A common stock pays a constant annual dividend of ₱4.00. The required rate of return is 12%. What is the value of the stock based on the DDM?
₱30
₱33.33
₱40
₱48
A publicly listed corporation failed to disclose a major acquisition within the required period. What rule did the company violate under PSE regulations?
Disclosure and Transparency rule
Minimum Public Ownership rule
Insider Trading prohibition
Market Manipulation rule
An investor sells 5,000 shares at ₱52 per share. He originally bought them at ₱46. Selling fees: Broker commission = 0.25%, SCCP fee = ₱0.01 per share, VAT on commission = 12% of commission. Compute the net capital gain.
₱28,940
₱29,222
₱29,475
₱29,860
Company A is valued at ₱260B, Company B at ₱85B, and Company C at ₱14B. Based on typical market categories: Which are correctly classified?
A = Large-cap, B = Mid-cap, C = Small-cap
A = Mid-cap, B = Small-cap, C = Micro-cap
A = Large-cap, B = Large-cap, C = Small-cap
A = Mega-cap, B = Mid-cap, C = Small-cap
A preferred share is convertible into 3 ordinary shares. Market price of the ordinary share is ₱62. The preferred share currently trades at ₱165. Which is TRUE?
Conversion value is ₱186, preferred is overvalued
Conversion value is ₱165, preferred is correctly valued
Conversion value is ₱186, preferred is undervalued
Conversion value is ₱168, preferred is undervalued
Which term refers to the total money earned by a business from primary operations?
Expenses
Gains
Net Income
Revenue
What is the term for the cost incurred by a business in generating revenue?
Assets
Equity
Expenses
Net Sales
A stock has a market price of ₱120, EPS of ₱6, and pays ₱3 dividends annually. What is its Dividend Yield?
2.5%
3%
5%
6%
Which of the following BEST describes treasury shares?
Shares held by the government
Shares authorized but never issued
Shares issued but not yet subscribed
Shares reacquired by the company and no longer outstanding
A company’s total equity is ₱150,000,000. Preferred equity is ₱30,000,000. There are 4,800,000 ordinary shares outstanding. What is the Book Value Per Share?
₱20.83
₱22.50
₱25.00
₱26.50
A firm’s stock is trading at ₱95 and has a P/E ratio of 19. What is its EPS?
₱3.95
₱4.75
₱5.00
₱5.75
Which statement BEST describes preferred shareholders?
They have priority in dividends but usually no voting rights
They always receive dividends higher than common shareholders
They have unlimited voting rights
They cannot receive dividends
An investor purchased 10,000 ETF shares at ₱50 each. At year-end, NAV rises to ₱55 and he receives ₱1 dividend per share. What is his total percentage return?
10%
12%
14%
16%
Which market involves the FIRST sale of shares by a corporation (e.g., IPO)?
Over-the-Counter Market
Secondary Market
Primary Market
Auction Market
Rights are issued to existing shareholders primarily to:
Convert bonds to equity
Allow them to maintain ownership percentage during new share issuance
Purchase shares at market value
Reduce company debt
An investor purchases a 180-day Treasury Bill with a face value of ₱100,000 at ₱96,000. What is the discount amount?
₱3,500
₱4,000
₱5,000
₱6,000
If the T-Bill in Q1 has a 180-day term, what is the annualized yield using a 360-day year?
7.5%
8.33%
8.50%
9.00%
A ₱2,000,000 Commercial Paper is issued for 120 days at 6% discount rate. What is the price paid by the investor?
₱1,980,000
₱1,985,000
₱1,990,000
₱1,995,000
A ₱2,000,000 Commercial Paper is issued for 120 days at 6% discount rate. Using the amount of CP, How much is the amount received at maturity?
₱2,000,000
₱2,010,000
₱2,020,000
₱2,030,000
Which formula is used to compute the discount on a Treasury Bill?
Discount = F-P/P
Discount = F-P
Discount = P-F
Discount = F x r x t
A ₱500,000 CD pays 5% annual interest. How much will the investor receive at maturity after 1 year?
₱505,000
₱510,000
₱550,000
₱525,000
A ₱500,000 CD pays 5% annual interest. If the CD is sold after 6 months and the market yield is 4%, what is the approximate value received?
₱512,000
₱515,000
₱514,706
₱518,000
Ana invested ₱490,000 in a 182-day Treasury bill with a face value of ₱500,000. What represents Ana’s earnings at maturity?
₱500,000
₱990,000
₱10,000
₱490,000
A Treasury bill has a face value of ₱1,000,000 and is purchased at ₱970,000. What type of return does this illustrate?
Interest income
Capital contribution
Dividend income
Discount income
Mark plans to invest short-term funds for only 3 months and wants the lowest possible risk. Which investment best suits his objective?
Corporate bonds
Treasury bills
Preferred shares
Mutual funds
If nominal interest rate is 8% and expected inflation is 3%, the real interest rate is approximately:
4.85%
5.00%
5.25 %
6.00%
A company borrows ₱1,000,000 at 6% p.a. for 5 years. Using the amortization formula, the annual payment is closest to:
₱220,000
₱230,000
₱250,000
₱237,396
A ₱500,000 bond with 8% coupon matures in 4 years. If market yield is 6%, the bond’s price will be:
Less than ₱500,000
More than ₱500,000
Cannot be determined
A 91-day Treasury bill has a face value of ₱200,000 and was purchased for ₱195,500. If held until maturity, how much will the investor receive?
₱195,500
₱196,000
₱200,000
₱204,500
Why are Treasury bills generally considered risk-free investments?
They are traded in foreign markets
They are insured by private banks
They are backed by the national government
They earn high interest rates
Jessa needs cash before her Treasury bill matures and sells it in the secondary market. The selling price depends mainly on:
Current market interest rates
The original purchase price
The face value only
The issuing bank
An investor prefers investments that do not pay periodic interest but are sold at a discount and redeemed at face value. Which investment matches this preference?
Corporate bond
Treasury bond
Treasury bill
Time deposit
If market interest rates increase after a Treasury bill is purchased, what is most likely to happen to its market price?
It will decrease
It will increase
It will remain the same
It will double
Which maturity period is most commonly associated with Treasury bills?
1 to 3 years
5 to 10 years
More than 10 years
Less than 1 year
Carlo compares Treasury bills with savings accounts. Which feature is unique to Treasury bills?
Can be used for daily withdrawals
Sold at a discount and redeemed at face value
Backed by the government
Guaranteed principal
Which statement is TRUE regarding preferred stock?
It offers guaranteed capital gains.
It gives shareholders the right to vote for directors.
It pays fixed dividends and has priority over common stock during liquidation.
It is riskier and has higher return potential than common stock.
The discount rate on a T-Bill represents:
Tax paid on T-Bill income
Annual interest paid on the bill
Profit the investor earns relative to the purchase price
Difference between face value and purchase price relative to face value
Amortization allows a borrower to:
Pay equal total payments covering interest and principal
Delay interest payments
Pay principal only
Pay interest only
If market yield rises, the price of an existing bond:
Increases
Decreases
Stays the same
Doubles
A money market instrument is:
A short-term, low-risk financial security
A long-term investment
A type of mutual fund
A derivative product
The term “face value” of a bond means:
Its market price
The amount received at maturity
The amount paid by investors
The coupon interest
What primarily drives stock price changes in the secondary market?
A company’s initial offering price
Movements in government bond rates
Continuous shifts in supply and demand from investors
The number of shares a company has authorized
The nominal interest rate refers to:
Interest after inflation is deducted
The inflation rate only
The stated rate not adjusted for inflation
The effective annual rate
In an Initial Public Offering (IPO), the primary role of underwriters is to:
Determine the company’s dividend policy
Assist the company in pricing, marketing, and selling shares to the public
Buy back shares after trading hours
Regulate trading activities in the secondary market
