.
The most comprehensive strategy that requires a constant examination of the investor’s needs and circumstances as well as changes in the capital market and this is reflected by continuous rebalancing of the portfolio
The strategy where the investment decision i.e. to reduce or increase exposure in risky or non-risky asset is dependent on the difference between portfolio value and the predetermined floor value of the portfolio
The strategy where the weight of each asset in the portfolio is fixed and periodically rebalanced to maintain the weight, taking into consideration the changes in the value of the assets
The strategy which focuses on changes in the capital market conditions and attempts to take advantage of perceived mispricing of securities
Swap contracts are multi-period agreement
Swap contracts are highly standardised and negotiated over the counter
Swap contracts are mainly used by institutional managers, corporations, banks and public sector institutions
Swap contracts have high default risk as there is no clearing house to ensure performance of the counterparty
Gross national product
Gross domestic product
National productivity
Total domestic productivity
(i) and (iii) only
(i), (ii) and (iv) only
(ii), (iii) and (iv) only
All of the above
Securities Commission Malaysia
Bank Negara Malaysia
Bursa Malaysia Securities Berhad
Companies Commission of Malaysia
Cost cutting strategy
Cost leadership strategy
Cost optimisation strategy
Cost competitiveness strategy
Coupon rate of the bond
Yield to maturity of the bond
Time to maturity of the bond
Prevailing risk-free rate of interest
As and when the value of the underlying exceeds the strike price
As and when the value of the underlying is less than the strike price
When the value of the underlying exceeds the strike price upon expiry
When the value of the underlying is less than the strike price upon expiry
To create value for shareholders of the company
To manage the company’s share price from declining
To prevent from an unwanted takeover by business competitors
To increase the company’s current earnings per share regardless of cash flow implication
Variance
Covariance
Semi-variance
Standard deviation
Convert the bond to a specified number of ordinary shares
Receive additional interest payments if inflation goes above a specified level
Sell the bond back to the issuer at a pre-determined price at a specified time
Sell the bond back to the issuer at a small premium over par at a specified time period
(ii) and (iii) only
(i), (ii) and (iv) only
(i), (iii) and (iv) only
All of the above
A
B
C
D
To determine the expected rate of return of a potential project
To determine the weightage of assets in the capital structure of a company
To determine the amount a company should retain from its earnings and the dividend payout
To determine the hurdle rate for decisions related to acceptance or rejection of a project
As nominal GNP increases, money supply increases
As nominal GNP increases, money supply decreases
As nominal GNP increases, money supply remain unchanged
As nominal GNP remain unchanged, money supply increases
A strategy that focuses on changes in capital market conditions and attempts to take advantage of perceived mispricing in securities
A strategy that concentrates on adding value to the portfolio through careful selection of securities
A strategy that needs a constant rebalancing of the portfolio to achieve the target returns
A strategy where the portfolio is constructed to reflect a benchmark index
Bond A
Bond B
Bond C
Bond D
(i) and (ii) only
(iii) and (iv) only
(i), (ii) and (iii) only
All of the above
Book value of its equity will fall
Market value of its equity will increase
Total value of the company will remain unchanged
Market value of its debt will fall while the value of its equity will increase
The required return will increase for Share Y but will decrease for Share X
The required return will increase for Share X but will decrease for Share Y
The required return will decrease by the same amount for both Share X and Share Y
The required return will increase for both Shares but the increase will be greater for Share Y than for Share X
– 0.75
– 0.5
0
+ 0.5
(i) only
(ii) only
(ii) and (iii) only
(iii) and (iv) only
Bird-in Hand Theory
Tax Preference Theory
Residual Dividend Policy
Dividend Irrelevance Theory
A
B
C
D
0.22
0.36
2.80
4.55