Fight Finance

Courses  Tags  Random  All  Recent  Scores

Question 71  CAPM, risk

Stock A has a beta of 0.5 and stock B has a beta of 1. Which statement is NOT correct?



Question 110  CAPM, SML, NPV

The security market line (SML) shows the relationship between beta and expected return.

Buying investment projects that plot above the SML would lead to:



Question 522  income and capital returns, real and nominal returns and cash flows, inflation, real estate

A residential investment property has an expected nominal total return of 6% pa and nominal capital return of 2.5% pa. Inflation is expected to be 2.5% pa.

All of the above are effective nominal rates and investors believe that they will stay the same in perpetuity.

What are the property's expected real total, capital and income returns?

The answer choices below are given in the same order.



Question 587  option

Which of the following statements about option contracts is NOT correct? For every:



Question 592  future, margin call

A trader buys one December futures contract on orange juice. Each contract is for the delivery of 10,000 pounds. The current futures price is $1.20 per pound. The initial margin is $5,000 per contract, and the maintenance margin is $4,000 per contract.

What is the smallest price change would that would lead to a margin call for the buyer?



Question 620  bond pricing, income and capital returns

Let the 'income return' of a bond be the coupon at the end of the period divided by the market price now at the start of the period ##(C_1/P_0)##. The expected income return of a premium fixed coupon bond is:



Question 743  price gains and returns over time, no explanation

How many years will it take for an asset's price to triple (increase from say $1 to $3) if it grows by 5% pa?



Question 841  gross domestic product, government spending

The government spends money on:

  • Goods and services such as defence, police, schools, hospitals and roads; and
  • Transfer payments (also called welfare) such as the pension, dole, disability support and student support.

When calculating GDP (=C+I+G+X-M), the ‘government spending’ component (G) is supposed to include:



Question 843  monetary policy, institution, no explanation

The Australian central bank implements monetary policy by directly controlling which interest rate?



Question 886  foreign exchange rate, no explanation

A British man wants to calculate how many British pounds (GBP) he needs to buy a 1 million euro (EUR) apartment in Germany. The exchange rate is 1.42 USD per GBP and 1.23 USD per EUR. What is the EUR 1 million equivalent to in GBP?