HKSI Paper 8 English Quiz 5
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HKSI Paper 8 English Quiz 5 – 2018
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Question 1 of 30
What was the Hong Kong equity market position by market capitalization at June 2011?
I. The seventh largest in the world and the third largest in Asia
II. The third largest in the world and the seventh largest in Asia
III. The ninth largest in the world and the seventh largest in Asia
IV. The fifth largest in the world and the third largest in AsiaCorrect
Question 2 of 30
What is NYSE Euronext?
I. NYSE Euronext is the first Association of Stockbrokers, established in 1891 in Hong Kong.
II. NYSE Euronext is the second exchange in the Hong Kong, formed in 1921.
III. NYSE Euronext is one of the leading derivatives markets in the Asia-Pacific area, established in 1976.
IV. NYSE Euronext is a cross-border exchange group created by the combination of NYSE Group, Inc. and Euronext N.V, on April 4, 2007.Correct
Question 3 of 30
Which are the key features of the Hong Kong stock market?
I. Market covers all major sectors
II. 7th largest by capital raised from initial public offerings (“ipo”) in 2010
III. 3rd largest market in asia in june 2011 by market capitalization
IV. 2nd largest market in the world by market capitalization in june 2011
V. Highly liquid marketCorrect
Question 4 of 30
According to the Hang Seng Indexes Company Limited into how many market sectors the companies listed on the Hong Kong stock market are classified?
I. Three market sectors
II. Eleven market sectors
III. Seven market sectors
IV. Nine market sectorsCorrect
Question 5 of 30
Which are the basic ways to calculate interest?
I. Nominal interest and real interest
II. Simple interest and Nominal interest
III. Simple interest and compound interest
IV. Compound interest and real interestCorrect
Question 6 of 30
If you calculate the interest receivable, using simple interest, on a term deposit for 1 year with a principal of HKD15,000 and an annual interest rate of 4.75%, which will be the correct answer?
Question 7 of 30
If you calculate the interest payable, using compound interest, on a 3-year loan with a principal of HKD100,000 and an annual interest rate of 5.25%, what will be the correct answer?
Question 8 of 30
Which statement are correct regarding to interest rate?
I. Nominal interest rates are quoted or stated in nominal terms without adjustment for inflation or compounding.
II. Real interest rates take into account changes in the purchasing power of money over time.
III. Nominal interest rates takes account of inflation.
IV. The interest rate on financial instruments is generally quoted in nominal terms.Correct
Question 9 of 30
Which relationships are correct?
I. Nominal interest rate = real interest rate x inflation rate + real interest rate + inflation rate
II. Nominal interest rate = inflation rate + real interest rate + inflation rate
III. Real interest rate = inflation rate- nominal interest rate
IV. Real interest rate = nominal interest rate – inflation rateCorrect
Question 10 of 30
Nominal interest rate 10 %, Inflation 3%, What will be the Real interest rate?
Question 11 of 30
Which statements are correct regarding to Flat yield curve?
I. A flat yield curve reflects market expectations that interest rates will remain stable in the future.
II. A flat yield curve indicates that interest rates are expected to fall in the future.
III. A flat yield curve could be a reflection of government monetary policy action attempting to reduce interest rates in a sluggish economy.
IV. A flat yield curve reflects the transitionary stage from a positive to an inverse yield curve, or vice versa.
V. A flat yield curve on securities increases to reflect the greater risk for investors.Correct
Question 12 of 30
What does Inflation refer to?
I. Inflation refers to the general increase in the price of goods and services over time.
II. Inflation is a measure of the responsiveness or sensitivity of the bond price with respect to the change in market interest rate.
III. Inflation means a loss of purchasing power, i.e. each dollar of income purchases fewer goods and services over time.
IV. Inflation is the weighted average of the maturities of all the income streams (interest and principal) from a bond.Correct
Question 13 of 30
The world is currently experiencing very low interest rates. How has inflation contributed to this situation?
I. When inflation levels decrease, central banks may react by increasing interest rates in an attempt to lessen the impact on the economy.
II. With low inflation, inflationary expectations are high and this keeps interest rates low.
III. With low inflation, inflationary expectations are low and this increases interest rates.
IV. With low inflation, inflationary expectations are low and this keeps interest rates low.Correct
Question 14 of 30
It is forecast that Hong Kong will increasingly experience inflationary pressure. How would this affect the stock market?
I. The burdens on investors and most companies will increase
II. The investment incentive and company profit performance will be reduced.
III. There is a negative impact on share prices.
IV. The burdens on investors and most companies will decrease.
V. The investment incentive and company profit performance will be increased.Correct
Question 15 of 30
What statements are correct regarding to Economic Cycle?
I. The term “cycle” suggests that fluctuations occur at regular intervals and follow a regular pattern.
II. The term “cycle” suggests that fluctuations occur at irregular intervals and follow an irregular pattern.
III. Cycles are always easy to predict.
IV. The length and amplitude of a cycle do vary, and there can be cycles within cycles.
V. Cycles are not always easy to predict.Correct
Question 16 of 30
Which are the most widely quoted index in the Hong Kong market?
I. Hang Seng Index
II. Dow Jones indexex
III. NASDAQ indices
IV. Nikkei indexes
V. MSCI indicesCorrect
Question 17 of 30
Which shareholdings are not excluded from Freefloat adjustment?
I. Lock-up shares
II. Strategic holdings
IV. Preference sharesCorrect
Question 18 of 30
Which size indexes are included in the Hang Seng Composite Size Indexes?
I. The Hang Seng Composite largecap,
II. The Hang Seng Composite midcap
III. The Hang Seng Composite Industry Indexes
IV. The Hang Seng Composite smallcap IndexesCorrect
Question 19 of 30
How many industry indexes are the Hang Seng Composite Industry Indexes divided into?
I. 7 industry indexes
II. 9 industry indexes
III. 13 industry indexes
IV. 11 industry indexesCorrect
Question 20 of 30
What does “red chips” refer to?
I. Red chips are mainland-controlled companies incorporated outside mainland China and listed in Hong Kong.
II. Red chips are stocks that have at least 50% of sales revenue derived from the mainland.
III. Red chips are stocks that have at least a 50% shareholding directly held either by mainland entities or by companies controlled by such entities.
IV. Red chips are stocks that have at least 30% of sales revenue derived from the mainland.
V. Red chips are stocks that have at least a 30% shareholding directly held either by mainland entities or by companies controlled by such entities.Correct
Question 21 of 30
Which statement are not correct regarding to International indices?
I. International indices are used to estimate the impact on domestic markets.
II. The most common International index is the FTSE 100, which tracks the performance of the 100 largest UK-domiciled companies on the London stock market.
III. International indices aim to measure the 30-calendar-day expected volatilityof the HSI implicit in the prices of near-term and next-term HSI options that are being traded on hkex.
IV. International indices are used to track the performance of world markets.
V. International indices are used by domestic investors to assess the performance of other markets around the world.Correct
Question 22 of 30
Which statements are correct regarding to S&P indices?
I. S&P indices consist of numerous global and country-specific indices, which track the performance of stocks around the world.
II. The best-known index is the S&P 500, which is a widely used benchmark for US equity performance.
III. The S&P indices tracks over 3,000 indices.
IV. The S&P indices cover stocks traded on the National Association of Securities Dealers Automated Quotations.Correct
Question 23 of 30
Which is the series of indices that primarily track the Japanese stock market?
I. The Nikkei 225 Stock Average
II. The Nikkei 500 Stock Average
III. The Nikkei 100 Stock Average
IV. The Nikkei 525 Stock AverageCorrect
Question 24 of 30
Why do companies go public (listed)?
I. To secure access to the capital market.
II. Listing provides the regulatory framework for attracting equities currently listed in overseas markets.
III. To gains initial and also ongoing access to the capital market.
IV. Listing allows the company to raise additional capital for expansion.Correct
Question 25 of 30
Why would a company list on Growth Enterprise Market (GEM)?
I. To gain access to capital markets
II. To share of risk
III. To allow owners to realize profits on their interests
IV. To promote companyCorrect
Question 26 of 30
Which statement are correct regarding to the secondary market?
I. The secondary market is where a company raises new capital and securities are issued for the first time.
II. Listed securities are traded on the secondary market, which operates between one investor and another.
III. Liquidity is an important aspect of the secondary market, as it is essential that there are sufficient buyers and sellers to facilitate trading in a stock.
IV. The secondary market is an important part of the financial system and the primary market relies on a liquid secondary market.Correct
Question 27 of 30
What does broker refer to?
I. A broker is a firm that acts as an intermediary between a buyer and a seller of securities.
II. A broker is an individual or organization (e.g. an investment bank) that acts as a principal rather than an agent in securities transactions.
III. A broker studies companies by reviewing both historical and current information such as annual and interim reports, company announcements and media coverage.
IV. A broker assists individual investors to develop their financial plans, using special analytical tools to determine his clients’ financial goals and objectivesCorrect
Question 28 of 30
Which aren’t the responsibilities of a share registrar?
I. Distribution of dividends and bonus shares
II. Mailing of financial reports to shareholders
III. Transfer of shares
IV. Issuance of share certificates
V. Acts as a principal rather than an agent in securities transactionsCorrect
Question 29 of 30
Which aren’t the obligations of LP?
I. Providing liquidity for warrants by means of continuous quotes or quote requests from five minutes after the market has opened until the market closes
II. Providing liquidity for at least 10 board lots of a warrant
III. Mailing of financial reports to shareholders
IV. Specifying in the listing document the maximum spread between the bid and offer prices for each warrant
V. Specifying in the listing document the response time for each quote request.Correct
Question 30 of 30
Under which conditions there is no need for the LP to provide liquidity?
I. During the pre-market opening session and the first five minutes after the market has opened
II. During slow market
III. When trading in the underlying asset of a warrant is suspended
IV. When the issuer or lp has technical difficulties in its normal operationsCorrect