Question 1

A properly selected sample for use in constructing a market indicator series will consider the sample's source, size, and

Accepted Answer

A)   breadth.
B)   average beta.
C)   value.
D)   variability.
E)   dividend record.

Question 2

An equally weighted indicator series is also known as an unweighted indicator series.

Accepted Answer

A) True 
 B)False

Question 3

The actual index movements are typically based on the arithmetic mean of the percent changes in price or value for the stocks in the

Accepted Answer

A)   equally-weighted index.
B)   price-weighted index.
C)   unweighted index.
D)   value-weighted index.
E)   over-weighted index.

Question 4

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.6. Compute the arithmetic mean of the price change of Stocks Q, R, and S from days T to T + 1.

Accepted Answer

A)   8.65 percent
B)   10.14 percent
C)   15.69 percent
D)   30.42 percent
E)   47.08 percent

Question 5

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
  Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003.
​
-Refer to Exhibit 4.5. Calculate the price weighted series for Dec 31, 2003, prior to the splits.

Accepted Answer

A)   81.69
B)   100.0
C)   72.5
D)   121.25
E)   119.25

Question 6

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
  *2:1 Split on Stock Z after Close on Jan. 13, 2005
**3:1 Split on Stock X after Close on Jan. 15, 2005
The base date for index calculations is January 13, 2005
-Refer to Exhibit 4.2. Calculate a price weighted average for January 16th.

Accepted Answer

A)   30
B)   32
C)   34
D)   36.13
E)   No37

Question 7

The NYSE series should have higher rates of return and risk measures than the AMEX and OTC series.

Accepted Answer

A) True 
 B)False

Question 8

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
  Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003.
​
-Refer to Exhibit 4.5. Calculate the percentage return in the price weighted series for the period Dec 31, 2000 to Dec 31, 2004.

Accepted Answer

A)   12.68 percent
B)   20.00 percent
C)   21.76 percent
D)   33.33 percent
E)   40.00 percent

Question 9

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.6. If an equal-weighted index is constructed on Day T with $10,000 in each stock, what is the percentage change in wealth for this index on Day T + 1? Assume a base index value of 100 on Day T.

Accepted Answer

A)   8.65 percent
B)   10.14 percent
C)   15.69 percent
D)   30.42 percent
E)   47.08 percent

Question 10

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.1. For a value-weighted series, assume that Day T is the base period and the base value is 100. What is the new index value for Day T + 1, and what is the percentage change in the index from Day T?

Accepted Answer

A)   106.33, 6.33 percent
B)   107.48, 7.48 percent
C)   109.93, 9.93 percent
D)   108.7, 8.7 percent
E)   107.56, 7.3 percent

Question 11

Which of the following is TRUE of the various market index series?

Accepted Answer

A)   A low correlation exists between the U.S. indexes and those of Japan.
B)   The NYSE series have higher rates of return and risk measures than the AMEX and OTC series.
C)   A low correlation exists between alternative series that include almost all NYSE stocks.
D)   A low correlation exists between alternative bond series.
E)   None of these are correct.

Question 12

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.3. Calculate the average annual rate of change for GB Industries for the five-year period using the arithmetic mean.

Accepted Answer

A)   0.098%
B)   9.80%
C)   8.50%
D)   8.00%
E)   89.00%

Question 13

Exchange-Traded Funds (ETF) are depository receipts that give investors a pro rata claim on the capital gains and cash flows of securities held by financial institutions.

Accepted Answer

A) True 
 B)False

Question 14

A price weighted series is disproportionately influenced by larger capitalization companies.

Accepted Answer

A) True 
 B)False

Question 15

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
  Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003.
​
-Refer to Exhibit 4.5. Calculate the value weighted index for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Accepted Answer

A)   121.25
B)   100.0
C)   81.69
D)   72.5
E)   120.0

Question 16

Of the following indices, which includes the most comprehensive list of stocks?

Accepted Answer

A)   New York Exchange Index
B)   Standard and Poor's Index
C)   American Stock Exchange Index
D)   NASDAQ Series Index
E)   Wilshire Equity Index

Question 17

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.7. What would be the total percentage change in an equally weighted portfolio of ABC?

Accepted Answer

A)   13.33 percent
B)   18.67 percent
C)   23.41 percent
D)   26.67 percent
E)   36.83 percent

Question 18

The Ryan Treasury Index is an example of a

Accepted Answer

A)   bond market indicator series.
B)   stock market indicator series.
C)   composite security market series.
D)   world market series.
E)   commodity market series.

Question 19

The low correlations between the U.S. and Japan confirm the benefit of global diversification.

Accepted Answer

A) True 
 B)False

Question 20

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
  *2:1 Split on Stock Z after Close on Jan. 13, 2005
**3:1 Split on Stock X after Close on Jan. 15, 2005
The base date for index calculations is January 13, 2005
-Refer to Exhibit 4.2. What is the divisor at the beginning of January 14th?

Accepted Answer

A)   3.0
B)   2.5
C)   2.2734
D)   1.9375
E)   3.2852

Exam 4: Security Market Indexes and Index Funds

Of the following indices, which includes the most comprehensive list of stocks?

Correct AnswerverifiedShow Answer

The actual index movements are typically based on the arithmetic mean of the percent changes in price or value for the stocks in the

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. ​ -Refer to Exhibit 4.5. Calculate the percentage return in the price weighted series for the period Dec 31, 2000 to Dec 31, 2004.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.3. Calculate the average annual rate of change for GB Industries for the five-year period using the arithmetic mean.

Correct AnswerverifiedShow Answer

Exchange-Traded Funds (ETF) are depository receipts that give investors a pro rata claim on the capital gains and cash flows of securities held by financial institutions.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.6. If an equal-weighted index is constructed on Day T with $10,000 in each stock, what is the percentage change in wealth for this index on Day T + 1? Assume a base index value of 100 on Day T.

Correct AnswerverifiedShow Answer

A price weighted series is disproportionately influenced by larger capitalization companies.

Correct AnswerverifiedShow Answer

The low correlations between the U.S. and Japan confirm the benefit of global diversification.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. ​ -Refer to Exhibit 4.5. Calculate the price weighted series for Dec 31, 2003, prior to the splits.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) *2:1 Split on Stock Z after Close on Jan. 13, 2005 **3:1 Split on Stock X after Close on Jan. 15, 2005 The base date for index calculations is January 13, 2005 -Refer to Exhibit 4.2. What is the divisor at the beginning of January 14th?

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.7. What would be the total percentage change in an equally weighted portfolio of ABC?

Correct AnswerverifiedShow Answer

Which of the following is TRUE of the various market index series?

Correct AnswerverifiedShow Answer

The NYSE series should have higher rates of return and risk measures than the AMEX and OTC series.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.6. Compute the arithmetic mean of the price change of Stocks Q, R, and S from days T to T + 1.

Correct AnswerverifiedShow Answer

An equally weighted indicator series is also known as an unweighted indicator series.

Correct AnswerverifiedShow Answer

The Ryan Treasury Index is an example of a

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.1. For a value-weighted series, assume that Day T is the base period and the base value is 100. What is the new index value for Day T + 1, and what is the percentage change in the index from Day T?

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) *2:1 Split on Stock Z after Close on Jan. 13, 2005 **3:1 Split on Stock X after Close on Jan. 15, 2005 The base date for index calculations is January 13, 2005 -Refer to Exhibit 4.2. Calculate a price weighted average for January 16th.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. ​ -Refer to Exhibit 4.5. Calculate the value weighted index for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Correct AnswerverifiedShow Answer

A properly selected sample for use in constructing a market indicator series will consider the sample's source, size, and

Correct AnswerverifiedShow Answer

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USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. -Refer to Exhibit 4.5. Calculate the percentage return in the price weighted series for the period Dec 31, 2000 to Dec 31, 2004.

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Correct Answer
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USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. -Refer to Exhibit 4.5. Calculate the price weighted series for Dec 31, 2003, prior to the splits.

Correct Answer
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Correct Answer
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USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) Stocks W and X had 2 for 1 splits after the close on Dec 31, 2003. -Refer to Exhibit 4.5. Calculate the value weighted index for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Correct Answer
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Correct Answer
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