Yuan, CFA, is chief investment officer of Golden Securities. Recently, Yuan found that the

A.must understand and comply with all applicable laws.

B.must not engage in practices that distort prices or artificially inflate trading volume with the intent to mislead market participants.

C.must deal fairly and objectively with all clients when providing investment analysis, making investment recommendations, taking investment action, or engaging in other professional activities.

A.5-year, 8% coupon bond.

B.15-year, 12% coupon bond.

C.5-year, 12% coupon bond.

D.15-year, 8% coupon bond.

A.6.5%.

B.7.4%.

C.8.6%.

D.8.0%.

A.The call price acts as a floor on the value of a callable bond.

B.The value of a callable bond is equal to the value of the straight bond component plus the value of the embedded call option.

C.When yields rise, the value of a callable bond may not fall as much as a similar, straight bond.

D.The value of a callable bond will always be equal to or greater than an otherwise identical non-callable bond.

A.whose coupon rate will increase as market rates decrease and decrease as market rates increase.

B.that may, under certain circumstances, require the bondholder to make payments to the issuer.

C.whose coupon is determined by subtracting a reference rate from some stated maximum rate.

D.that has an implicit cap on the maximum coupon rate and typically includes a floor on the minimum coupon rate.

million Current book value = $225 million Sales = $750 million Earnings = $75 million Cash flow = $125 million Stock price = $7.50 Which of the following statements regarding Gourmet and Company is most accurate?

A.The price/book ratio is 0.90.

B.The price/cash flow ratio is 0.50.

C.The price/sales ratio is 0.33.

D.The price to earnings (P/E) ratio is 33.3.

A.A short sale involves securities the investor does not own.

B.A short seller loses if the price of the stock sold short decreases.

C.If the stock pays a dividend, the short seller owes the dividend to the lender of the stock.

D.A short seller is required to set up a margin account.

eph Cardinal, to discuss Cardinal’s investment constraints. Samuel has established that: Cardinal plans to retire from his job as a bond salesman in 17 years, after which this portfolio will be his primary source of income. Cardinal has sufficient cash available that he will not need this portfolio to generate cash outflows until he retires. Cardinal, as a registered securities representative, is required to have Samuel send a copy of his account statements to the compliance officer at Cardinal’s employer. Cardinal opposes certain policies of the government of Lower Pannonia and does not wish to own any securities of companies that do business with its regime. To complete his assessment of Cardinal’s investment constraints, Samuel still needs to inquire about Cardinal’s:

A.liquidity needs.

B.legal and regulatory factors.

C.unique needs and preferences.

D.tax concerns.

A.divided by the product of the assets’ standard deviations of returns.

B.multiplied by the product of the assets’ variances of returns.

C.multiplied by the product of the assets’ standard deviations of returns.

D.divided by the product of the assets’ variances of returns.

a price of $26 per share over the next year. The company is not expected to pay a dividend. The following information pertains: RF = 8% ERM = 16% Beta = 1.7 Should the investor purchase the stock?

A.No, because it is undervalued.

B.Yes, because it is overvalued.

C.No, because it is overvalued.

D.Yes, because it is undervalued.