Question 1

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 unweighted index (geometric mean)  for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Accepted Answer

A)   119.25
B)   121.25
C)   151.25
D)   95.25
E)   100.25F) B) and D)
G) A) and E)

Question 2

The Standard & Poor's International Index consists of three international, 19 national, and 38 international industry indexes.

Accepted Answer

A) True 
 B)False

Question 3

Index movements are influenced by differential prices of the components in a(n)

Accepted Answer

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

Question 4

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 value weighted index for Jan. 13th if the initial index value is 100.

Accepted Answer

A)   111.54
B)   100
C)   102.31
D)   123.07
E)   143.25F) A) and B)
G) C) and D) B

Question 5

An example of a value weighted stock market indicator series is the

Accepted Answer

A)   Dow Jones Industrial Average.
B)   Nikkei Dow Jones Average.
C)   S & P 500 Index.
D)   Value Line Index.
E)   Shearson Lehman Hutton Index.F) B) and E)
G) C) and D)

Question 6

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.1. Assume that a stock price-weighted indicator consisted of the four issues with their prices. What are the values of the stock indicator for Day T and T + 1, and what is the percentage change?

Accepted Answer

A)   36.25, 38.75, 6.9 percent
B)   38.75, 36.25, -6.9 percent
C)   100, 106.9, 6.9 percent
D)   107.48, 106.33, 1.15 percent
E)   106.9, 100, 5.7 percentF) A) and C)
G) C) and D)

Question 7

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.1. Compute an unweighted price indicator series, using geometric means. What is the percentage change in the index from Day T to Day T+1? Assume a base index value of 100 on Day T.

Accepted Answer

A)   5.35 percent
B)   7.48 percent
C)   9.93 percent
D)   6.33 percent
E)   0 percentF) B) and E)
G) C) and D)

Question 8

Exchange traded funds

Accepted Answer

A)   are exactly the same as index mutual funds.
B)   can be bought and sold like common stocks.
C)   cannot be sold short.
D)   have a high management fee.
E)   cannot be timed for capital gain tax realizations.F) B) and E)
G) B) and C)

Question 9

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the arithmetic mean.

Accepted Answer

A)   0.28%
B)   1.28%
C)   2.80%
D)   3.58%
E)   6.38%F) All of the above
G) A) and B)

Question 10

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) 
 
-Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the geometric mean.

Accepted Answer

A)   0.09%
B)   1.99%
C)   3.99%
D)   4.50%
E)   4.67%F) C) and D)
G) A) and C)

Question 11

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, after the splits.

Accepted Answer

A)   72.5
B)   100.0
C)   119.25
D)   121.25
E)   81.69F) A) and B)
G) A) and E)

Question 12

Studies of correlations among monthly equity price index returns have found

Accepted Answer

A)   low correlations between various U.S. equity indexes.
B)   high correlations between various U.S. equity indexes.
C)   high correlations between U.S. and non-U.S. equity indexes.
D)   negative correlations between various U.S. equity indexes.
E)   high correlations between equity and bond indexes.F) A) and E)
G) All of the above B

Question 13

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 value weighted index for January 15th if the initial index value is 100.

Accepted Answer

A)   102.31
B)   100
C)   123.07
D)   111.54
E)   121.32F) A) and B)
G) B) and E)

Question 14

Which of the fundamental factors was NOT used in the Fundamental Index created by Research Affiliates, Inc.?

Accepted Answer

A)   sales
B)   profits (cash flow) 
C)   leverage (debt/equity) 
D)   net assets (book value) 
E)   dividendsF) D) and E)
G) B) and C)

Question 15

A bond market index is easier to create than a stock market index because the universe of bonds is much broader than that of stocks.

Accepted Answer

A) True 
 B)False

Question 16

A value weighted index automatically adjusts for stock splits.

Accepted Answer

A) True 
 B)False

Question 17

Which is an example of a Style Index?

Accepted Answer

A)   small-cap growth
B)   mid-cap value
C)   small-cap value
D)   mid-cap growth
E)   All of these are correct.F) B) and D)
G) B) and C)

Question 18

The major U.S. stock indexes are highly correlated.

Accepted Answer

A) True 
 B)False

Question 19

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 value weighted index for the period Dec 31, 2003 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 percentF) A) and B)
G) B) and C)

Question 20

The Morgan Stanley group index for Europe, Australia, and the Far East (EAFE) is a price weighted index.

Accepted Answer

A) True 
 B)False

Exam 4: Security Market Indexes and Index Funds

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 unweighted index (geometric mean) for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Correct Answer
verified

The Standard & Poor's International Index consists of three international, 19 national, and 38 international industry indexes.

Correct Answer
verified

Index movements are influenced by differential prices of the components in a(n)

Correct Answer
verified
B

Correct Answer
verified
B

An example of a value weighted stock market indicator series is the

Correct Answer
verified

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.1. Assume that a stock price-weighted indicator consisted of the four issues with their prices. What are the values of the stock indicator for Day T and T + 1, and what is the percentage change?

Correct Answer
verified

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.1. Compute an unweighted price indicator series, using geometric means. What is the percentage change in the index from Day T to Day T+1? Assume a base index value of 100 on Day T.

Correct Answer
verified

Exchange traded funds

Correct Answer
verified

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the arithmetic mean.

Correct Answer
verified

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the geometric mean.

Correct Answer
verified

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, after the splits.

Correct Answer
verified

Studies of correlations among monthly equity price index returns have found

Correct Answer
verified
B

Correct Answer
verified

Which of the fundamental factors was NOT used in the Fundamental Index created by Research Affiliates, Inc.?

Correct Answer
verified

A bond market index is easier to create than a stock market index because the universe of bonds is much broader than that of stocks.

Correct Answer
verified

A value weighted index automatically adjusts for stock splits.

Correct Answer
verified

Which is an example of a Style Index?

Correct Answer
verified

The major U.S. stock indexes are highly correlated.

Correct Answer
verified

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 value weighted index for the period Dec 31, 2003 to Dec 31, 2004.

Correct Answer
verified

The Morgan Stanley group index for Europe, Australia, and the Far East (EAFE) is a price weighted index.

Correct Answer
verified

Exam 4: Security Market Indexes and Index Funds

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 unweighted index (geometric mean) for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Correct AnswerverifiedShow Answer

The Standard & Poor's International Index consists of three international, 19 national, and 38 international industry indexes.

Correct AnswerverifiedShow Answer

Index movements are influenced by differential prices of the components in a(n)

Correct AnswerverifiedB

Correct AnswerverifiedB

An example of a value weighted stock market indicator series is the

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.1. Assume that a stock price-weighted indicator consisted of the four issues with their prices. What are the values of the stock indicator for Day T and T + 1, and what is the percentage change?

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.1. Compute an unweighted price indicator series, using geometric means. What is the percentage change in the index from Day T to Day T+1? Assume a base index value of 100 on Day T.

Correct AnswerverifiedShow Answer

Exchange traded funds

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the arithmetic mean.

Correct AnswerverifiedShow Answer

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S) -Refer to Exhibit 4.4. Calculate the average annual rate of change for this index for the five-year period using the geometric mean.

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, after the splits.

Correct AnswerverifiedShow Answer

Studies of correlations among monthly equity price index returns have found

Correct AnswerverifiedB

Correct AnswerverifiedShow Answer

Which of the fundamental factors was NOT used in the Fundamental Index created by Research Affiliates, Inc.?

Correct AnswerverifiedShow Answer

A bond market index is easier to create than a stock market index because the universe of bonds is much broader than that of stocks.

Correct AnswerverifiedShow Answer

A value weighted index automatically adjusts for stock splits.

Correct AnswerverifiedShow Answer

Which is an example of a Style Index?

Correct AnswerverifiedShow Answer

The major U.S. stock indexes are highly correlated.

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 value weighted index for the period Dec 31, 2003 to Dec 31, 2004.

Correct AnswerverifiedShow Answer

The Morgan Stanley group index for Europe, Australia, and the Far East (EAFE) is a price weighted index.

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 unweighted index (geometric mean) for Dec 31, 2004. Assume a base index value of 100. The base year is Dec 31, 2003.

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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, after the splits.

Correct Answer
verified

Correct Answer
verified
B

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

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 value weighted index for the period Dec 31, 2003 to Dec 31, 2004.

Correct Answer
verified

Correct Answer
verified