2005 april
no4
A bond has a value of £1,000 printed on its face. Its current open market value is £980. Analysts expect the value of the bond to rise to £985 within the next seven days. In your personal opinion it will rise to £982. What is the nominal value of this bond?
A. £ 980
B. £982
C. £985
D. £ 1000
Can i know why the answer is D?
no 5
Preference shares are often thought of as being more like debt than equity. Which of the following best explains this?
A. the tax treatment of preference dividends
B. the ability to buy and sell preference shares
C.the fixed nature of participation in profits
D. the ability to make capital gains or losses
why the answer is A?
no6
A business has decided to acquire a specialised p iece of machinery using a finance lease. A bank has agreed to buy the asset on the business behalf and will lease the asset for the whole of its useful life. When will the asset become the property of the business?
On delivery of the asset.
On the first lease payment.
Once the final lease payment has been made.
Never.
Can I know why the answer is never
no 10
An investor sold a holding of a stock with the intention of buying a n identical holding of the same stock a few weeks later at roughly the same price. What possibility best explains the likely reason for this behaviour?
The investor is keen to develop a relationship with a new broker.
The investor is trying to realise a capital gain in order to utilise an annual tax allowance that will be lost otherwise.
The investor is trying to stimulate the market s interest in the shares by generating trading volume.
The investor wishes to confirm the liquidity of the stock
which would be the correct answer and why?
no4
A bond has a value of £1,000 printed on its face. Its current open market value is £980. Analysts expect the value of the bond to rise to £985 within the next seven days. In your personal opinion it will rise to £982. What is the nominal value of this bond?
A. £ 980
B. £982
C. £985
D. £ 1000
Can i know why the answer is D?
no 5
Preference shares are often thought of as being more like debt than equity. Which of the following best explains this?
A. the tax treatment of preference dividends
B. the ability to buy and sell preference shares
C.the fixed nature of participation in profits
D. the ability to make capital gains or losses
why the answer is A?
no6
A business has decided to acquire a specialised p iece of machinery using a finance lease. A bank has agreed to buy the asset on the business behalf and will lease the asset for the whole of its useful life. When will the asset become the property of the business?
On delivery of the asset.
On the first lease payment.
Once the final lease payment has been made.
Never.
Can I know why the answer is never
no 10
An investor sold a holding of a stock with the intention of buying a n identical holding of the same stock a few weeks later at roughly the same price. What possibility best explains the likely reason for this behaviour?
The investor is keen to develop a relationship with a new broker.
The investor is trying to realise a capital gain in order to utilise an annual tax allowance that will be lost otherwise.
The investor is trying to stimulate the market s interest in the shares by generating trading volume.
The investor wishes to confirm the liquidity of the stock
which would be the correct answer and why?
