P4217-Investment and Portfolio Management ǀMidterm Examinationǀ 1st semester

2019-2020

Date of Examination: October 8, 2019

Republic of the Philippines

PALAWAN STATE UNIVERSITY
Brooke’s Point, Palawan

Test I – Multiple Choice

Identify the letter of the choice that bestcompletes the statement or answers the questions.

1. The relationship between risk and return in investing can be stated as:
A. Higher risk indicates lower return C. Lower risk indicates higher return
B. Higher risk indicates higher return D. No relationship between the two

2. A type of debt that a company issues to investors for a specified amount of time is called.
A. stocks C. Mutual Fund
B. Bonds D. None of the above

3. It is an investment to a specific company.

A. Stock C. Mutual Fund
B. Bonds D. Certificate of Deposits

4. It allows the Investors to purchase many investments in a single transaction

A. Stock C. Mutual Fund
B. Bonds D. Certificate of Deposits

5. It is something that says you own a part of a corporation

A. Stock C. Mutual Fund
B. Bonds D. Certificate of Deposits

6. Investors that are individuals with an earned income exceeds $200,000 or who have a net worth of
more than $1,000,000 are called.
A. Peer-to-peer lenders C. Angel Investors
B. Banks D. Venture Capitalists

7. Individuals or groups that offer funding to small business owners are known as.
A. Peer-to-peer lenders C. Angel Investors
B. Banks D. Venture Capitalists

8. Business owners who often rely on family, friends or close acquaintances to invest in their companies.
A. Personal Investors C. Angel Investors
B. Peer-to-peer investors D. Venture Capitalists

9. A market which deals with long-term corporate stocks are classified as

A. Liquid Markets C. Capital Markets
B. Short-term Markets D. Money Marke

10. Which of the following is not a type of financial market?

A. Capital Market B. Money Market
Prepared by Joel M. Pangisaban 1
P4217-Investment and Portfolio Management ǀMidterm Examinationǀ 1st semester
2019-2020

Date of Examination: October 8, 2019

C. Derivative Market D. Gold Market

11. Advising clients on buying and selling companies, raising money, economic risk management is a
practice of
A. Investment Management C. Giving Advice
B. Providing Financing D. Research

12. Managing the investment assets refers to.

A. Investment Management C. Giving Advice
B. Providing Financing D. Research

13. Buying and selling shares, debt products, commodities, derivatives and related product on behalf of
clients and to make money for the banks is a process of.
A. Investment Management C. Trading
B. Giving Advice D. Research

14. A pool of money used by a company to purchase a variety of stocks, bonds, or money market
instrument. Provides diversification and professional management for investor.
A. Simple Fund C. Close End Fund
B. Open End Fund D. None of the above

15. Is the result of an IPO or initial public offering. Companies launch this when going public to raise capital.
A. Simple Fund C. Close End Fund
B. Open End Fund D. None of the abov

16. IT aims to generate performance by purchasing shares when they are below ‘fair value’ using a range
of valuation methodologies including discounted cash flow analysis, price/earnings multiples, price-to-
book values or dividend yield..
A. Value Investors C. GARP
B. Growth Investors D. Quality Investors

17. A document that formalizes an institution's goals, objectives, and guidelines for asset management,
investment advisory contracting, fees, and utilization of consultants and other outside professionals.
A. Investment C. Investment Policy
B. Investment Management D. None of the above

18. It aims to invest in the best quality companies assessed on the basis of factors such as returns on
equity, stability of earnings, balance sheet health, stability of management, transparency of disclosure
to investors and strength of the business model.

A. Value Investors C. GARP

B. Growth Investors D. Quality Investors

19. It aims to generate returns from allocating money to companies that exhibit superior growth of earnings,
with less emphasis on the valuation.
A. Value Investors B. Growth Investors
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P4217-Investment and Portfolio Management ǀMidterm Examinationǀ 1st semester
2019-2020

Date of Examination: October 8, 2019

D. Quality Investor
C. GARP
20. These funds invest in stocks. These funds aim to grow faster than money market or fixed income funds.
A. Money Market Funds C. Bond Funds
B. Equity Funds D. Balance funds

Test II – Modified True or False. Identify the following as true or false. Write TRUE if the statement is
correct, if not, write FALSE and WRITE THE CORRECT WORD to make it right

1. The Market in which the company can raise funds is the primary market.
2. Stocks is a type of investor.
3. Peer-to-peer lender is a type of investment
4. Real Assets are physical assets that have an intrinsic worth due to their substance and properties.
5. Assets that are valuable properties that is not physical in nature is called financial assets.
6. Commodities, real estate, equipment, and natural resources are all types of real assets.
7. Financial assets tend to be more stable but less liquid than real assets.
8. Portfolio Investment is a diversified approach to investing that seeks a return.
9. A portfolio investment is a short-term and active strategy.
10. An investment is an asset or item acquired with the goal of generating income or appreciation.

Test III- Analysis

Read and analyze the given situations and identify which types of investors they belong.

A. Bank
B. Angel investors
C. Peer-to-peer
Lenders
D. Venture Capitalist
E. Personal investors
1. Mr. Ibrahim Has a net worth of over $50 Million and earning $300,000 annually, he wants to
invest his money to the stock market.
2. Ms. Dela Torre owns a business. Her father wants to invest in her enterprise.
3. Daganta with his group wants to invest to the Company that Mr. Betorin owns.
4. Motortradeis in need of Capital, FCB offers them a loan.
5. MangInasal has been flooded by many investors after they’ve reached a $20 Million in their
Monthly revenue.

Read and analyze the given situations and identify which types of investments they belong.

A. Stocks
B. Bonds
C. Cash Equivalents
D. Mutual Funds
6. Muksin acquired a long-term loan amounting to $5 Million from Bangko De Oro.
7. Joey Issued 10,000 shares in the public to gather investors.

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P4217-Investment and Portfolio Management ǀMidterm Examinationǀ 1st semester
2019-2020

Date of Examination: October 8, 2019

8. Jeanne Mae Issued Cheque to TOYOTA to buy Company Vehicle.

9. Mr. Gamos acquired a stocks and bonds from different companies.
10. Ms. Brin Issued a Promissory note to Mr. Tomines for his investment in Ms. Brin’s Company.

Read and analyze the given situations and identify which types of investments they belong.

A. Advantage
B. Disadvantage

11. By Investing in an Open-end fund, you are Holding a diversified portfolio and it will lessen the
risk.
12. The Fund will be highly liquid if you invest in Open-End Fund.
13. It will charge you high fees and expenses and you should maintain high cash reserves when you
invest in Open- End Fund.
14. Investing in Close End Fund will ensure you that the prices will be transparent.
15. Investing in Close End Fund will be only available through brokers.

Test IV- Computation: Net Asset Value

Compute for the Following: (5pts Each)

Assume that a mutual fund has P2 million worth of total investment in different securities, which is
calculated based on the day’s closing price for each individual asset. It also has P6 million of cash and
each equivalents on hand, as well P1 million in total receivable. Accrued income for the day is 75, 000. the
fund has 6 million in short-term liabilities and 3 million in long-term liabilities. Accrued expenses for the day
are P50, 000. The fund has 5 million shares, 1 million of the shares has already been issued.

1. What is the Value of Outstanding Shares?

2. Compute for Total Assets.
3. Compute for total Liabilities
4. Compute for Net Asset Value.

Test V- Evaluating (20pts)

If you are going to invest your money, what do you think is the best securities to invest in? Stock?
Bonds? Or Mutual Funds? Justify your answer.

Prepared by Joel M. Pangisaban 1

P4217-Investment and Portfolio Management ǀMidterm Examinationǀ 1st semester
2019-2020

Date of Examination: October 8, 2019

Prepared by Joel M. Pangisaban 1