VU Midterm Past Papers
FIN630 Past Papers — Midterm Past Papers & Solved MCQs
28 solved midterm past paper MCQs for FIN630 at Virtual University, each with the correct answer marked. Use them to learn the VU question style and test your recall. An independent study tool — not affiliated with VU.
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Q1. _________ provides an automatic execution of limit orders up to 1,099 shares at the best bid or offer.
- A.SuperDOT✓ Correct
- B.NASDAQ
- C.Auction market
- D.NYSE direct
Q2. The trading of listed securities in the NASDAQ market is known as:
- A.Primary market
- B.Third market✓ Correct
- C.Secondary market
- D.Fourth market
Q3. A self-regulatory body that licenses brokers and generally oversees the trading practices of Over the counter(OTC) securities is known as __________ .
- A.Securities and Exchange Commission (SEC)
- B.National Association of Security Dealers (NASD)✓ Correct
- C.Initial Public Offering (IPO)
- D.Offered for Sale (OFS)
Q4. Companies that have historically paid a larger than average percentage of their profit as dividend to their shareholders is known as:
- A.Blue chip companies
- B.Cyclical companies
- C.Growth companies
- D.Income companies✓ Correct
Q5. Which of the following is suitable for analyzing short term investments?
- A.Horizontal analysis
- B.Fundamental analysis
- C.Technical analysis✓ Correct
- D.Ratio analysis
Q6. A procedure for valuing the price of a stock by using predicted dividends and discounting them back to present value is known as.
- A.Dividend Discount Model✓ Correct
- B.The Residual Earning Model
- C.None of the given options
- D.Capital Asset Pricing Model
Q7. A good time is characterized by which of following situation?
- A.Market prices moving above the moving average✓ Correct
- B.Market prices moving below the moving average
- C.Market prices exactly same as moving average
- D.None of the given options
Q8. Which of the following statement is FALSE about Elliot Wave Theory?
- A.It made extensive use of Fibonacci series
- B.It is based on repeating 8 waves’ cycles
- C.It identified three movements in security prices✓ Correct
- D.It was proposed by R.N. Elliot
Q9. Which of the following depicts ratio of share price to stockholder equity?
- A.Debt coverage ratio
- B.Price-to-sales ratio
- C.Price-to-market value ratio
- D.Price-to-book value ratio✓ Correct
Q10. On which of the following financial statements, revenues and expenses can be found?
- A.Balance sheet
- B.Income statement✓ Correct
- C.Statement of cash flows
- D.Statement of changes in equity
Q11. Which of the following is a basket of stocks that tracks a particular sector, investment style, geographical area, or the market as a whole?
- A.Exchange traded fund✓ Correct
- B.Open-end fund
- C.Closed-end fund
- D.Unit investment trust
Q12. Which of the following is defined as an investment strategy that involves ongoing buying and selling actions by the investors?
- A.Make or Buy strategy
- B.Active strategy✓ Correct
- C.Passive strategy
- D.Buy-and-Hold strategy
Q13. Which of the following is an example of brokerage fee charged by a stockbroker?
- A.Margin profit
- B.Insurance premium
- C.Transaction cost✓ Correct
- D.Capital expenditure
Q14. Which of the following would be considered as the most bullish indicator?
- A.A price decrease with heavy volume
- B.A price increase with small volume
- C.A price increase on heavy trading✓ Correct
- D.No change in price but an increase in volume
Q15. Financial securities with a maturity of less than a year from their original issue date are sold in which of following market?
- A.Money market✓ Correct
- B.Bond market
- C.Equity market
- D.Derivative market
Q16. _____________ enables market participants to get accurate and up-to-date price information.
- A.Fair pricing function
- B.Continuous pricing function✓ Correct
- C.Economic function
- D.Exchange function
Q17. The average price of a security or currency over a specified time period used to spot pricing trends by smoothing out the large fluctuations is known as:
- A.Moving Average✓ Correct
- B.Standard deviation
- C.Variance
- D.Beta
Q18. An investor will purchase shares of companies in the development stage for:
- A.Current income
- B.Current income and capital gains
- C.Passive losses to offset other income
- D.Capital gains only✓ Correct
Q19. Which of the following industry is NOT sensitive to business cycle and price changes?
- A.Defensive industry✓ Correct
- B.Interest sensitive industry
- C.Growth industry
- D.Cyclical industry
Q20. Which of the following categories is NOT a financial statement element?
- A.Cash flow✓ Correct
- B.Contributed capital
- C.Assets
- D.Distributions
Q21. Which of the following statement about a security is true, if it's beta > 1.0?
- A.Security is more risky than the market✓ Correct
- B.Security is less risky than market
- C.Security is exactly as risky as maket
- D.It is not possible to predict riskiness of a security by beta
Q22. A bad time in market will persist when the market prices move:
- A.Above the moving average
- B.Below the moving average✓ Correct
- C.Exactly same as moving average
- D.Firstly up then down the moving average
Q23. What does price earning ratio indicate?
- A.It indicates how many interest payments could be made with a firm's earnings.
- B.It indicates how much investors pay for Rs.1 earning of the company.✓ Correct
- C.It indicates the percentage of earnings paid to shareholders.
- D.It indicates the per share profit available for distribution to the shareholders.
Q24. Which of the following is TRUE regarding price earning ratio?
- A.P/E=Earnings available to common stockholders/outstanding shares
- B.P/E=Market price per share/dividend per share
- C.P/E=Market price per share/earning per share✓ Correct
- D.P/E=Dividend per share/earning per share
Q25. Which of the following stock’s price move in opposite direction to that of interest rates?
- A.Growth stock
- B.Value stock
- C.Interest sensitive stock✓ Correct
- D.Defensive stock
Q26. Which of the following is NOT a component of ROA?
- A.Turnover
- B.Leverage✓ Correct
- C.Sales
- D.Net income margin
Q27. Which of the following statement about the types of the orders is LEAST accurate?
- A.Market orders are orders to buy or sell at the best price available.
- B.Limit orders are orders to buy or sell at or away from the market price.
- C.A stop buy order is used to protect a short position in a security and is placed below the current market price.✓ Correct
- D.Limit order must specify a price and a time limit.
Q28. Which of the following statements regarding life cycle of an industry is MOST accurate?
- A.In the pioneering phase, profits are small or negative.✓ Correct
- B.In the mature growth phase, sales growth falls below normal for the first time.
- C.During the stabilization phase, growth rates are still above the growth rates in economy.
- D.The growth of the substitute products increases total market share & causes profits to increase in the deceleration phase.