Module 12 - Ccofia Assessment Centre
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- 1.Which of the following international financial organisations perform the roles described below?
- facilitate the expansion and balance growth of international trade
- providing fund and resources to members who experience balance of payment difficulties
- provide multilateral systems of payment
- A.
International Monetary Fund (IMF)
- B.
World Bank
- C.
World Trade Organization (WTO)
- D.
Asian Infrastructure Investment Bank (AIIB)
- 2.All of the followings are components of Capital Account, EXCEPT :
- A.
External borrowings
- B.
Corporate investment
- C.
Short-term capital
- D.
Investment income
- 3.An entrepreneur is seeking investors to invest in a project in which the entrepreneur will manage the operations. Both parties agreed in a 70:30 profit split, while the losses will be borne by the investor. Which shariah concept does this imply?
- A.
(A) Ijarah
- B.
(B) Mudharabah
- C.
(C) Murabahah
- D.
(D) Musharakah
- 4.A social club wants to raise revenue to cover club activities to cover its running cost. Its revenue comes from membership fees and partly from selling charity movie tickets. There is a huge demand for movie attendance and exceeds the hall capacity. The demand for membership is price inelastic and the demand for the movie tickets is price elastic. To reduce the crowding without changing its total income, what should the club do?
- A.
Increase the movie ticket price but decrease the membership fee
- B.
Decrease the movie ticket price but increase the membership fee
- C.
Increase the movie ticket price and increase the membership fee
- D.
Decrease the movie ticket price and decrease the membership fee
- 5.Which of the followings is a standardised measure of systematic risk?
- A.
Standard deviation
- B.
Coefficient of variance
- C.
Beta
- D.
Variance
- 6.Laris Herbs Berhad has a capital structure comprises of RM25 million debt, RM5 million preference shares and RM20 million in ordinary shares. The cost of debt, preference shares and ordinary shares are 8%, 10%, and 15%, respectively. Assuming that the tax rate is 25%, what is the the weighted cost of capital for Laris Herbs Berhad?
- A.
8.25%
- B.
11.7%
- C.
10.0%
- D.
11.0%
- 7.The cash inflows and (outflows) associated with Project A and Project B are as follows:Time01234Project A(120,000)40,00050,00060,00080,000Project B(120,000)30,00060,00070,00080,000Calculate the payback period for project A.
- A.
3 years
- B.
2 years 5 months
- C.
2 years 6 month
- D.
2 years 8 months
- 8.Highland Bhd’s shares have the following features :Economic ConditionProbability (%)Rate of Return (%)Strong3020Average4512Poor40-3Based on potential rate of return and probability above, which of the following shares is/are better to invest as compared to Highland Bhd’s shares? SharesExpected Rate of Return (%)P8Q9R10S11
- A.
P and Q only
- B.
R and S only
- C.
R only
- D.
S only
- 9.Based on the statement below, which of the following statements is true about Melisa and John? Melisa and John are both considering to invest into Sino Shares with an expected return of 15% per annum and variance of 50. Melisa’s risk aversion is 6, John’s risk aversion is -2.
- A.
(A) Melisa is more risk adverse than John
- B.
(B) John is more risk adverse than Melisa
- C.
(C) Both have the same risk adverse level
- D.
(D) John is risk neutral
- 10.All of the following statements are major assumptions of Arbitrage Pricing Theory (APT), EXCEPT:
- A.
Investors prefer more wealth to less wealth
- B.
Investors can borrow or lend at a risk-free rate
- C.
Capital markets are perfectly competitive
- D.
The return on asset is expressed in a linear equation
- 11.Which of the following statements describing beta is CORRECT?
- The higher the beta , the more volatile the asset in comparison to the market
- The beta of a market portfolio is 1
- The higher the beta, the higher the expected return from asset
- Fundamental betas are designed to capture the effects of technical changes of the security
- A.
(i) and (ii) only
- B.
(i), (ii) and (iii) only
- C.
(i), (ii) and (iv) only
- D.
(i), (iii) and (iv) only
- 12.Melisa and John are both considering to invest into Sino Shares with an expected return of 15% per annum and variance of 50. Melisa’s risk aversion is 6, John’s risk aversion is -2.Which of the following is true in relation to the UTILITY LEVEL of Melisa and John?
- A.
John’s utility level is lower than Melisa’s
- B.
Melisa’s utility level is lower than John’s
- C.
Both John and Melisa utility level has the same level
- D.
John’s utility level depends on Melisa’s
- 13.All of the followings are TRUE regarding the factors that a portfolio manager would need to consider in evaluating the performance of a portfolio, EXCEPT:
- A.
Comparison of performance with the best fund in the market
- B.
Consider limitations faced in managing the portfolio
- C.
Determine the time frame of the performance evaluation
- D.
Identify an appropriate benchmark
- 14.For evaluation of performance of portfolio managers, which of the following components are comprised in performance attribution analysis?
- Securities selection effect.
- Market relative study and evaluation.
- Strategy policy decision.
- Asset allocation assessment.
- A.
(i), (ii), and (iii) only
- B.
(ii), (iii), and (iv) only
- C.
(i), (iii), and (iv) only
- D.
(i), (ii), and (iv) only
- 15.Azman wants to measure the excess return of his investment portfolio against the portfolio’s systematic risk. Which of the following performance evaluation measures should he use use?
- A.
Sharpe Index
- B.
Treynor Index
- C.
Asset allocation effect
- D.
Security selection effect
- 16.Which of the following portfolios has the highest Treynor index?PortfolioReturnStandard DeviationBetaExcess ReturnsManU20%44%1.82.0ManC16%37%0.92.5Arsene17%41%1.53.0Leicester22%33%1.25.5
- A.
ManU
- B.
ManC
- C.
Arsene
- D.
Leicester
- 17.All of the following contract terms are part of a debt contract, EXCEPT:
- A.
The timing and schedule of the interest and repayment period of the borrowing
- B.
Financial requirements and restrictions imposed on the debt instrument subscriber
- C.
The size of the issue of the borrowings
- D.
The rights of the holder of the debt instrument
- 18.All of the followings are a form of bank security for a loan, EXCEPT?
- A.
Assignment
- B.
Call warrants
- C.
Negative pledge
- D.
Debenture
- 19.XYZ Berhad has a direct business transaction with a foreign client and the company is arranging a trade loan agreement with a bank for the transaction. The transaction is expected to have a continuous shipment over the next 24 months. Which of the following loan facilities will be most suitable to facilitate the business transaction?
- A.
Bill of collection
- B.
Red Clause Letter of Credit
- C.
Revolving Letter of Credit
- D.
Back-to-back documentary Letter of Credit
- 20.Ordinary shares are expected to give higher returns as compared to bonds and debentures
- A.
There is a higher interest rates on bonds and debenture
- B.
There is uncertainty of future cash for ordinary shares
- C.
There is a higher demand for ordinary shares
- D.
There is a lower demand of bonds and debenture
- 21.Ria Berhad has an issued and paid-up share capital of RM500 million and the share price is currently trading at RM95 per share. The management of the company is of the view that the share price is too high and might be unattractive to potential shareholders of the Company. Which of the following corporate exercises should Ria Berhad undertake to align the price of the Company’s shares to the rest of the industry?
- A.
Bonus issues
- B.
Capital reduction
- C.
Rights issues
- D.
Share repurchase
- 22.Calculate the theoretical share price of the Company after a 1:2 bonus exercise. Authorised share capital : RM1,000,000 @ RM1.00 par valueIssued paid up share capital : RM200,000Share price is RM30 per share
- A.
RM10
- B.
RM20
- C.
RM60
- D.
RM90
- 23.Garden Bread’s common stock has a beta of 1.2. The expected return on the market is 8%, and the risk-free rate is 4%. According to the capital-asset pricing model, the required return on Garden Bread common stocks should be?
- A.
7.2%
- B.
8.8%
- C.
10.2%
- D.
7.6%
- 24.Which of the following parties has the right to sell an underlying asset at a specific price for a specific time period?
- A.
Put option seller
- B.
Put option buyer
- C.
Call option seller
- D.
Call option buyer
- 25.Robert holds an option which allows him to buy an underlying asset. Currently the option’s strike price is above the underlying asset price. What is the type of option does he has and the moneyness of Robert’s option at this point of time?
- A.
Put option – in the money
- B.
Put option - out of money
- C.
Call option – in the money
- D.
Call option – out of money
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