Market Organisation and Structure

Functions of the Financial System

Which of the following is NOT taking the role of a lender in the financial system?

Functions of the Financial System

Which of the following is a pre-requisite for capital allocation efficiency?

Assets, Contracts and Markets

In the event of a company liquidation, what is the priority of payments to parties involved? Sort from the highest to lowest priority (drag and drop).

Assets, Contracts and Markets

QPR fund is a pooled investment fund in which its investors trade the fund in the secondary market. The fund prices is always very close to its Net Asset Valuation (NAV). Which type of fund is QPR most likely to be?

Assets, Contracts and Markets

A food processing company is concerned about the volatility of wheat prices, and would like to have long-term security such that it gets its supply of wheat at a fixed price. Which of the following contracts is the most appropriate for this purpose?

Assets, Contracts and Markets

Anthony is a market speculator and often makes very short-term trades on gold. Which type of market is the most suitable for Anthony?

Financial Intermediaries

Peter owns 15% of a public-listed company and would like to sell all his shares. Which of the following is the most appropriate action that he should take?

Financial Intermediaries

Which of the following is mostly likely NOT a benefit of investing in Asset-backed Securities (ABS)?

Financial Intermediaries

Mario purchases high coverage for his health insurance because he knows that his family history is going to lead to high healthcare costs. Which of the following best describes this kind of risk to insurance companies?

Financial Intermediaries

Which of the following is likely NOT a role of a clearinghouse?

Positions and Leverage

Which of the following hedgers should take the short position?

Emily bought ABC stock at $20,000. She placed the required initial margin of $6,000, and the maintenance margin requirement was 20%. What is the margin call price for Emily’s purchase?

Positions and Leverage

Emily bought ABC stock at $20,000. She placed the required initial margin of $6,000 with a broker which charges 0% commission and 4% call money rate. Two years later, she sold her position in ABC stock for $25,000, and collected $1,500 dividend during the period.

What is Emily’s actual % gain from this transaction?

Order Instructions

The highest bid price for a stock is currently $46.80 and the lowest ask price is currently $47.70.

Monique placed a limit SELL order at $48.00. What is the most appropriate terminology for Monique’s order?

Order Instructions

Channing is a momentum trader and would like to issue an order to buy a stock when it breaks its resistance level. What kind of order should Channing issue?

Primary Markets

IHPT Corp has engaged an investment bank to manage its IPO. IHPT would like to raise $100 million, but the investment bank advised that IHPT may not be able to raise the full amount if the IPO is undersubscribed.

What is the most likely offering for this arrangement?

Secondary Markets and Market Structures

Match the following descriptions to the type of market. (Drag and drop)

Secondary Markets and Market Structures

Order (from highest to lowest) the priority in which orders are matched in an order-driven market.

(Drag and drop)

Well-Functioning Financial Systems

Which of the following is not a benefit of a well-functioning financial system?

Market Regulation

The finance minister of LalaLand would like to address widespread overcharging and misleading information in the financial industry. What is the least appropriate action that he should impose?