This type of stock analysis focuses more on the movement of chart prices

to evaluate value of securities

A) Fundamental analysis

B) Financial analysis

C) Technical analysis

D) Stock analysis

In Fundamental analysis of stocks, which of the following is not considered

as an Intra-Factor?

A) Customers in the Market

B) Competitive Advantage

C) Corporate Governance

D) Business Model of the Organization

Which of the following statements is incorrect?

A) Book value of equity per share effectively indicates a firm's net asset
value (total assets - total liabilities) on a per-share basis

B) Book value per share (BVPS) takes the ratio of a firm's common equity
divided by its number of shares outstanding.

C) The measure is used mainly by stock investors to evaluate a company's

stock price

D) When a stock is overvalued, it will have a higher book value per

share in relation to its current stock price in the market
It is an agreement involving the purchase(buying) of securities by one party
from another with the promise to sell them back at a given date in the
future.

A) Reverse Repurchase Agreement

B) Sales and Leaseback

C) Leaseback

D) Repurchase Agreement

Which of the following is a money market security?

A) Mortgage

B) Treasury note

C) Commercial Paper

D) Municipal bond

It is a bank-issued time deposit that specifies an interest rate and maturity

date and is negotiable (saleable on a secondary market).

A) Negotiable Certificate of Deposit

B) Commercial Paper

C) Banker’s Acceptance

D) Treasury Bills
Bonds issued by state and local governments are called ________ bonds

A) Corporate

B) Commercial

C) Treasury

D) Municipal

This is the legal contract that specifies the rights and obligations of the
bond issuer and the bondholders.

A) Private Placement

B) Repurchase Agreement

C) Bond indenture

D) Commitment Underwriting

It is the lowest price that the seller is willing to accept for a security

A) Average Market Price

B) Quoted Price

C) Bid Price

D) Ask Price
A primary market is one which

A) newly printed money is transferred to the banks.

B) the financial assets are traded for the first time.

C) money market dealers make their most important trades.

D) the Bank of Philippine Islands conducts its monetary policy

Higher interest rates

A) increases the demand for money

B) increase the volume of money supplied

C) decreases the opportunity cost of holding money

D) encourage people to spend more

It is the risk that a security cannot be sold at a predictable price with low
transaction costs at short notice.

A) Maturity Risk

B) Special Provisions

C) Default Risk

D) Liquidity Risk

It is the risk that an asset’s sale price will be lower than its purchase price

A) Country Risk

B) Commercial Risk
C) Currency Risk

D) Price Risk

Which of the following statements is correct?

A) Capital market instruments include both all types of debt and common
stocks.

B) If your uncle in New York sold 100 shares of Microsoft through his
broker to an investor in Los Angeles, this would be a primary market
transaction

C) The PSE does exist as a physical location; and, it represents a

loose collection of dealers who trade stocks electronically.

D) An example of a primary market transaction would be your uncle

transferring 100 shares of Wal-Mart stock to you as a birthday gift.

This type of stock analysis believes that the value of stocks is affected by
the business activities of a company and also economic activities.

A) Financial analysis

B) Fundamental analysis

C) Stock analysis

D) Technical analysis
Problem Solving:

1. CPI last year 180, and CPI this year is 200, The inflation rate then is?

2. The bond paid $150 per year in coupon interest on the last day of each
year (the last payment made today). You intend to hold the bond for three
more years and project that you will be able to sell it at the end of year 3 for
$860. You also project that the bond will continue paying $150 in interest
per year. Given the risk associated with the bond, its required rate of return
( r ) over the next three years is 9.5O percent. Accordingly, the bond’s fair
present value is

3. Jon Snow purchased a bond, costing 1000, three years ago, with a
current price of 1,150. This bond paid 80 year as interest payments (end of
each year). She wants to hold the bond for 4 more years and it is expected
to be sold at the end of year four at 1,250. It is also expected that there will
be no default of yearly interest payments. Assuming that the required rate
of return is 8%. Compute the price of the bond.

4. Arya Inc.'s latest net income was $1,250,000, and it had 225,000 shares
outstanding. The company wants to pay out 45% of its income. What
dividend per share should it declare?

5. Tyrion Corp. had retained earnings of $400,000 on its 2001 balance

sheet. In 2002, the company’s earnings per share (EPS) were $3.00 and its
dividends paid per share (DPS)were $1.00. The company has 200,000
shares of common stock outstanding. What will be the level of retained
earnings on the company’s 2002 balance sheet?
6. Cersie Inc.'s latest EPS was 3.50, its book value per share was 22.75, it
had 215,000 shares outstanding, and its debt ratio was 46%. How much
debt was outstanding?

7. You can purchase a Php 1 million treasury bill that is currently selling on
a discount basis at97 ½% of its face value. The T-bill is 140 days from
maturity. What is the Bond Equivalent Yield rate?

8. You can purchase a Php 1 million treasury bill that is currently selling on
a discount basis at97 ½% of its face value. The T-bill is 140 days from
maturity. What is the Discount Yield rate?

9. Suppose on can invest in a money market instrument that matures in 70

days that offers9% nominal annual interest rate, what is the effective
annual interest return on this security?

10. At a point in time, the asked (discount yield) of a 10,000 T-Bill is 0.9%.
How much is the price of this bill if the settlement date is on 77 days?