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HKSI Paper 8 English Quiz 2
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Question 1 of 30
Which are the exchanges that were resulted due to the post-war growth in the Hong Kong economy?
I. Far East Exchange (established in 1969)
II. Kam Ngan Stock Exchange (established in 1971)
III. Shenzhen Stock Exchange
IV. Kowloon Stock Exchange (established in 1972).
V. Shanghai Stock ExchangeCorrect
Question 2 of 30
What were the major reforms recommended by the Davison report?
I. The fundamental revision of the SEHK and its management
II. An extension of the SEHK settlement period to seven days
III. Development of a central clearing system
IV. A review of Hong Kong futures exchange limited (“HKFE”)
V. Sustainable development in the local bond marketCorrect
Question 3 of 30
Which statements are correct in regarding to NYSE Euronext?
I. NYSE Euronext is a cross-border exchange group
II. The major exchanges of NYSE Euronext are located in Europe and the US.
III. NYSE Euronext is the seventh largest exchange group in Asia.
IV. NYSE Euronext is created by the combination of NYSE Group, Inc. and Euronext N.V, on April 4, 2007.Correct
Question 4 of 30
What are the different securities traded on the SEHK?
I. Ordinary shares only
II. Both the ordinary and preference shares
IV. Unit trusts/mutual funds
V. Preference shares onlyCorrect
Question 5 of 30
What were the major reasons for the slow development of the Honk Kong debt market in the early decade?
I. The Hong Kong government has typically had a surplus budget
II. The credit rating downgrade of the US by Standard & Poor’s (“S&P”) on 5 August 2011 shook the Hong Kong market and other markets around the
III. The development of the European Union and the move to a single currency.
IV. The Hong Kong government has seldom borrowed via the debt market.Correct
Question 6 of 30
What are the reasons of issuing Exchange Fund Bills and Notes in 1990?
I. To assist banks in their liquidity management.
II. To prove a record of profitability as a condition of listing.
III. To accommodate companies with higher investment risk
IV. To facilitate the development of the local debt market
V. To enforce regulations and legislation, and supervises the exchanges, dealers and clearing housesCorrect
Question 7 of 30
Who does co-ordinate the offering of government bonds and manage the investment of the funds raised under the Hong Kong government bond programme?
I. The Hong Kong Monetary Authority (“HKMA”)
II. The Hong Kong Mortgage Corporation Limited (“HKMC”)
III. The Stock Exchange of Hong Kong Limited
IV. Hong Kong Futures Exchange Limited (“HKFE”)Correct
Question 8 of 30
On which products the derivatives market operates a futures and options market?
I. Equity index products
II. Gold futures
III. Domestic product
IV. Interest rate products
V. VHSI productsCorrect
Question 9 of 30
What was the total domestic market capitalization of the Hong Kong markets (Main Board and GEM) at June 2011?
I. HK$21,103.9 million
II. HK$12,103.9 billion
III. HK$21,103.9 billion
IV. HK$21,301.9 billionCorrect
Question 10 of 30
Into how many sectors Companies listed on the Hong Kong stock market are classified?
I. Seven market sectors
II. Three market sectors
III. Eleven market sectors
IV. Five market sectorsCorrect
Question 11 of 30
Which statements are correct in regarding to Shanghai Stock Exchange and Shenzhen Stock Exchange?
I. Shanghai Stock Exchange was established in November 1990
II. Shanghai Stock Exchange was the first exchange in mainland China
III. Shenzhen is identified as the country’s financial centre.
IV. Shenzhen Stock Exchange was established in December 1990
V. Shanghai Stock Exchange trades in A and B shares.Correct
Question 12 of 30
What was the percentage of the world’s equity value at June 2011 that the combined market capitalization of NYSE Euronext (US) and NASDAQ OMX represented?
I. Approximately 31% of the world’s equity value
II. Approximately 21% of the world’s equity value
III. Approximately 15% of the world’s equity value
IV. Approximately 7% of the world’s equity valueCorrect
Question 13 of 30
Which are the best known US indices and are the most widely used benchmarks of US equity performance?
I. The Dow Jones Industrial Index
II. The S&P 500 Index
III. The Nikkei indexes
IV. The Deutscher Aktien Index
V. The NASDAQ IndexCorrect
Question 14 of 30
Which are the key markets in Europe?
III. The UK
V. NYSE Euronext (Europe)Correct
Question 15 of 30
Which statements are correct in regarding to Interest rates?
I. Changes in interest rates also alter the asset allocation between the share and debt markets.
II. When interest rates rise, the cost of borrowing money decreases.
III. When interest rates rise, the interest burden is reduced and companies may expand.
IV. Interest rates involve the interaction between the supply of and demand for credit.
V. The level of interest rates reflects the price paid for the use of money or creditCorrect
Question 16 of 30
Technical analysis uses historical data to predict future market trends. What are the basic types of charts used in technical analysis?
I. Line charts
III. Wave patterns
IV. Point and figure chartsCorrect
Question 17 of 30
Which statements are correct in terms of Yield curves?
I. The yield curve is a curve plotting the yields of selected “benchmark” securities of the same type.
II. Yield curves is a tool that enables market participants to plot the performance of specific securities in different maturity ranges.
III. The yield curve is typically discussed within the context of a particular country or jurisdiction.
IV. The Yield curves on financial instruments is generally quoted in nominal terms.Correct
Question 18 of 30
What does Positive or normal yield curve refer to?
I. This is the “normal” situation where yield increases with an increase in the term to maturity.
II. An Positive yield curve reflects a situation where the short-term interest rates are higher than the long-term.
III. A positive yield curve is consistent with the expectations of rising inflation over the longer term, inflation which erodes the value of debt
IV. A Positive yield curve is consistent with the expectations of falling inflation (or disinflation) over the longer term.
V. The longer the term, the greater the uncertainty and therefore the greater the risk.Correct
Question 19 of 30
What does Flat yield curve reflect?
I. A flat yield curve reflects market expectations that interest rates will remain stable in the future.
II. A flat yield curve reflects a situation where the short-term interest rates are higher than the long-term.
III. A flat yield curve reflects that interest rates are expected to fall in the future.
IV. A flat yield curve reflects the transitionary stage from a positive to an inverse yield curve, or vice versa.Correct
Question 20 of 30
What are the most common theories or methods of technical analysis?
I. Dow Wave theories
II. Jones Wave theories
III. Index method
IV. Elliot Wave theoriesCorrect
Question 21 of 30
What does the Moving average convergence-divergence indicator show?
I. The moving average convergence-divergence indicator shows the relative movements of the short-and the long-term MAs.
II. The moving average convergence-divergence indicator shows the price movements based on historical price wave patterns and their underlying
III. The moving average convergence-divergence indicator measures and shows the extent to which a price leads or lags the MA or the trend deviation.
IV. The moving average convergence-divergence indicator the fluctuations in economic activity from boom to contraction.Correct
Question 22 of 30
Which are the Technical indicators?
I. The moving average (“MA”)
II. The relative strength indicator (“RSI”)
III. The moving average convergence-divergence indicator (“MACD”)
IV. The exponential moving average (“EMA”)Correct
Question 23 of 30
Which statements are correct in regarding to RSI?
I. RSI measures a stock’s strength relative to its own past performance.
II. RSI shows the relative movements of the short-and the long-term MAs.
III. RSI takes a micro view of the company and its financial position.
IV. RSI shows the fluctuations in economic activity from boom to contraction.
V. RSI is a rate of change indicator.Correct
Question 24 of 30
Which statements are correct in terms of Moving average (MA)?
I. Moving average is the calculation of the average closing prices for a specified period.
II. Moving average is a level or area on a chart above which market buying activities are sufficiently strong to overcome selling pressures.
III. Moving average s are used to smooth out price fluctuations so that the general trend is revealed.
IV. Moving average relies heavily on charts and data to help in predicting trends and turning points.Correct
Question 25 of 30
Which statements are correct technical analysis in regarding to charts and trend lines?
I. Line charts are diagrams of price movements that show the opening, highest, lowest and closing prices.
II. Bar charts plot closing prices for the chosen time period and draw a line to join the points.
III. Candlesticks show the highest, lowest, opening and closing prices for the chosen time period, plotted as vertical bars.
IV. Point and figure charts use a system of “O” and “X” to show downward and upward price movements.Correct
Question 26 of 30
What is Ratio analysis?
I. Ratio analysis is a tool to understand the financial position of a company, and is based on historical information.
II. Ratio analysis is a more realistic dimension to the valuation model, and assumes that dividends increase at a constant rate each year.
III. Ratio analysis is one of the most significant valuation models in modern finance.
IV. Ratio analysis is a method of evaluating securities by using historical market data to predict future market trends.
Question 27 of 30
What are included in Common solvency ratios?
I. Debt ratio,
II. Debt-to-equity ratio
III. Price earnings ratio
IV. Dividend yield
V. Interest coverageCorrect
Question 28 of 30
What do Solvency ratios indicate?
I. Solvency ratios indicate the percentage of assets financed by debt. Increasing debt and investing in assets can increase income and profit but
it does increase the risk levels of the company.
II. Solvency ratios indicate the ability of a company to meet its long-term and short-term obligations.
III. Solvency ratio is an indicator of a company’s financial structure.
IV. Solvency ratios measures a company’s ability to settle interest payments.Correct
Question 29 of 30
Which are not included in Profitability ratios?
I. Debtors’ turnover
II. Quick ratio
III. Asset turnover
IV. Return on assets, gross profit margin
V. Price earnings ratio (“P/E ratio”)Correct
Question 30 of 30
What are the costs paid by a client when completing a transaction on the Hong Kong stock market?
I. Agreed commission to the securities company or brokerage house
II. Transfer fee of HKD2.50 per new share certificate payable to share registrar
III. The transaction cost of trade and capital flow
IV. Administrative costs associated with listing, including ongoing costs of complying with regulatory requirements and keeping the market
V. Stamp duty payable to the governmentCorrect