1.Assuming all else stays equal, when interest rates rise

Select one:

a.

bond prices may go up or down, depending on the time to maturity of the bonds.

b.

bond prices go down.

c.

bond prices may go up or down, depending on whether it is a premium bond or a discount bond.

d.

bond prices go up.

2.Which securities mainly trade in the over-the-counter market?

Select one:

a.

Ordinary shares.

b.

Ordinary shares, corporate bonds & convertible bonds.

c.

Ordinary shares & corporate bonds.

d.

Corporate bonds & convertible bonds.

3.A company offered shares in their IPO at $2.00 each. Their first sale on the ASX was at $2.20. By the end of the first day of trading their shares were trading at $2.50 and today they are trading at $2.60. The cost of under-pricing the issue was

Select one:

a.

The number of shares issued multiplied by 20c

b.

The number of shares issued multiplied by 60c

c.

The number of shares issued multiplied by 50c

d.

The number of shares issued multiplied by 30c.

Clear my choice

4.Which list indicates the correct priority of payment of long-term of interest or dividends from corporate financial instruments, from highest to lowest?

Select one:

a.

Preference shares, corporate bonds, ordinary shares.

b.

Corporate bonds, preference shares, ordinary shares.

c.

Ordinary shares, preference shares, corporate bonds.

d.

Corporate bonds, ordinary shares, preference shares.

5.Entrepreneurs commonly raise seed capital by accessing

Select one:

a.

bank overdrafts and loans.

b.

all methods are correct.

c.

angel investors.

d.

personal savings and family loans.

6.As a result of a budget deficit increase, there was a corresponding increase in the amount of government bonds issued. Assuming other factors remain the same, what is most likely to happen to the market yield on government bonds under this scenario?

Select one:

a.

yields will fall.

b.

yields will not be affected.

c.

yields will rise.

d.

the answer cannot be determined.

7.The mixed growth dividend discount model of share valuation can be used to value companies that

Select one:

a.

exhibit non-constant growth followed by constant growth.

b.

exhibit supernormal growth followed by declining growth.

c.

do not pay any dividends.

d.

pay dividends that grow at a constant rate.