Sl urions M2557 Midterm Test 1 —~-February 5, 201%— ‘First name: Last name ‘Student Number: ‘Instructions ‘© This is 60-minute closed-book exam. ‘Only non-programmable calelators are permitted, ‘© There are 4 questions and 50 poists in total. The aumber of points allocated to each {question i specified right before each question. A breakdown of points for questions with subparts is also given. Your answers should be neatly written up in an organized fashion. The test will be graded ‘based on correctness ofthe solution and clarity ofthe exposition, + IF you need more space for your solution, use the back of the page and clearly i this, Grade table Question | 1014) 20) 3.5) 402) | Tora) | Mark1.(15 Points) (@ List the minimum four discrete steps that are required inthe trading of a financial asset. [4 points) er adh Galler \ocelke cadreber ach auge on - les dhe -Trode is oettted = Ounership reeorts ore upetabed {) State the sources of return for each of the following securities (the total of which will sum. to the total return of exch): [4 points] 1. Stock \ = Price eyprecinbion 1 Divvcends 2. Bond tim Cie gold pote be wehbe - Pvee appre. - Coupons (6) List four uses of derivatives [4 points] - Hedging, ~ Specusbbion « falucinn Wmmseckion sash + Lequleh ray acvibence4@) Stat one ofthe wo definitions ofan abirage strategy (2 points) D> = Reskless poll - reguies oo shal ashnent cqeenntead guyilne embblon obo ihc q ; LS + Leddess geo - gone riled alten S iyeracell ace oc getine ail yaar oe (2)