NO.106 Which of the following is true? The firm can claim compliance:

NO.107 Under the null hypothesis, Ho, x = y. Under the alternative hypothesis, x does not equal y. If the critical z-statistic for the desired significance level is 1.68 and you find the z-statistic to be -3.2, you should:

NO.108 A trial generates only two results, “success” and “failure.” The probability of success is higher than that of failure. The variance of the number of failures in 20 trials equals 2.35. The probability of success on a given trial equals ________.

NO.109 Calculate an 80% confidence interval for a population mean. You have a sample of 21, a sample mean of 25%, and a sample standard deviation of 10%. The sample appears to be approximately normally distributed.

NO.110 Critics of monopolistic competition argue that it is inefficient because the firms

NO.111 The ______ of an asset represents the interaction of supply and demand of the asset.

NO.112 Ms. Sweetwater’s biology class had a standard deviation of 2.4 on a standardized test, while Ms.
Quincy’s biology had a standard deviation of 1.2 on the same test. What can be said about these two classes?

NO.113 Which of the following statements regarding duration and a bond’s price volatility is (are) correct?
I). Duration is a linear estimate of a bond’s price change given an expected change in market interest rates.
II). Duration actually underestimates a bond’s price increase and decrease given an expected change in market interest rates.
III). The combined effect of a bond’s duration and convexity will be greater than a bond’s expected change related to duration alone.
IV). Convexity is an attempt to mitigate the error included with the duration measure.
A I and II
B. I and IV.
C. III and IV.

NO.114 Consider the following activity schedule:
Date Quantity Per Unit Total Cost Jan 1, Beginning Inventory 100 $18.00 $ 1,800.00 Mar 4, Purchase 400
19.00 7,600.00 Apr 1, Sold (50)
In a perpetual inventory system, what is the average cost per unit after the March 4 purchase?

NO.115 A company has a callable issue outstanding. If the volatility of interest rates increases, all of the following statements are true EXCEPT

NO.116 The main difference between a positive and negative covenant is (are):

NO.117 Which one of the following statements about the term structure of interest rates is true?

NO.118 Which statement below represents how embedded options of a bond affect the interest rate risk?

NO.119 Good Z can be bought and sold on both Market #1 and Market #2. Which of the following sets of prices for Good Z conform(s) to the no-arbitrage principle?
I). Market #1 = $75, Market #2 = $75
II). Market #1 = $125, Market #2 = $115
III). Market #1 = $87, Market #2 = $87

NO.120 Diminishing marginal returns occur when the marginal product of an additional worker is

NO.121 A hedge fund charges a base fee of 1.5% and an incentive fee of 15% on returns in excess of the risk-free rate. If the fund’s gross return is 8%, and the risk-free rate is 2.5%, the net return to the investor is:

NO.122 In a period of rising prices, many firms adopt the periodic LIFO method of accounting for inventory cost for tax purposes. When compared with periodic FIFO or average cost:

NO.123 A Treasury bill with 50-days till maturity is quoted with a bank discount rate of 3.50%. The holding period yield for this T-bill if purchased and held to maturity would be closest to

NO.124 Which of the following assumptions does the Gordon growth dividend discount model require?
I). Dividends grow at a constant rate.
II). The dividend growth rate continues indefinitely.
III). The required rate of return is less than the dividend growth rate.

NO.125 Select the correct statement(s).
I). Market-neutral fund is a hedge fund classification.
II). One drawback of fund of funds investing is higher fees.

NO.126 The probability that the price of a stock increases is 0.30. The price of the stock will either increase or decrease each day independently of what happened on the previous day. An experiment consists of observing the price of this stock during a 30-day period. What is the probability that the stock price will increase 10 days out of the 30 days?

NO.127 Banks are required by law to keep on hand to back up its deposits a minimum reserve of their checking deposits. This reserve is known as:

NO.128 Which of the following is (are) true?
I). A portfolio that lies above the efficient frontier is undervalued.
II). Efficient portfolios minimize variance for a given level of expected returns.
III). A zero beta portfolio is always efficient.
IV). A stock with zero correlation coefficient with a portfolio is not useful for further diversification.