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TUTORIAL 1

THE INVESTMENT ENVIRONMENT

1) Which of the following is an indirect investment?

A) Stocks in foreign companies

B) U.S. savings bonds

C) Mutual fundsD) Real estate

2) Which one of the following would be the most liquid investment?

A) stock

B) Series EE bond

C) money market mutual fund

D) real estate

3) Sarah purchased a stock one year ago at a price of RM32 a share. In the past year,

she has received four quarterly dividends of RM0.75 each. Today she sold the stock

for RM38 a share. Her capital gain per share isA) RM3.00.

B) RM6.00.

C) RM(6.00).

D) RM9.00.

4) Which of the following represent investment goals?

I. setting aside enough money to meet emergencies and basic needs

II. sheltering income from taxes

III. increasing current income

IV. saving funds for retirement

A) I and IV only

B) I, III and IV only

C) III and IV only

D) II, III and IV

5) Short-term investments

I. provide liquidity.

II. fill an important part of most investment programs.

III. provide a high rate of return with low risk.

IV. provide resources for emergencies.A) I and IV only

B) II and IV only

C) I, II and IV only

D) I, II, III and IV

6) Typical responsibilities of financial professionals in a corporate setting include

I. managing cash and short-term investments.

II. evaluating investment opportunities.

III. working one on one with individuals to formulate plans for reaching their

financial goals.

IV. interacting with financial markets to find sources of external financing such asdebt and equity.

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DII5018 - INTRODUCTION TO INVESTMENT

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A) I and IV only

B) I, II and IV only

C) II, III and IV only

D) I, II, III and IV

7) Jobs in which of the following fields require an understanding of the investmentenvironment?

I. Commercial banking.

II. Corporate finance.

III. Financial planning.

IV. Insurance.

A) I and IV only

B) I, II and IV only

C) II, III and IV only

D) I, II, III and IV

8) Daniel purchased a stock one year ago at a price of RM15 a share. In the past year,

she has received four quarterly dividends of RM0.80 each. Today she sold the stock

for RM18 a share. His capital gain and income per share is

A) RM6.20.

B) RM6.00.

C) RM(6.00).

D) RM9.00.

9) Jamal purchased a 1 lot stock equal to 1000 shares one year ago at a price of RM5

a share. In the past year, she has received annually dividends of RM1.70 each. Today

she sold the stock for RM7 per share. His capital gain and income from investment is

A) RM3700

B) RM1700.

C) RM(3700).

D) RM2000.

10) Razak purchased a bond certificate at price of RM 2000 and agreed interest is 7%

 per annum. Bond certificate maturity period is 5 years. After 5 years, the company

calling for bond in market. His capital gain and income from investment on Year 5 is

A) RM2000

B) RM2700.C) RM(2700).

D) RM2000.