::IFPHK-Student Corner::

Disclaimer: The questions provided on this website are NOT intended to constitute sample questions and/or past examination questions and should not be construed as such.

Acknowledgement: Mr. Ricky Chung and Ms. Teresa Fung

In future trading, the minimum level to which an equity position may fall before requiring additional margin is most accurately termed the


A		initial margin.

B		variation margin.

C		cash flow margin.

D		maintenance margin.

In a case that the insured has passed away, if the insurer finally discover the insured or policy holder has violated the principle of utmost good faith. The insurer then can take some actions against the insured except :


A		Refuse to pay the sum insured

B		fine them a large penalty

C		Withdraw the life policy

D		Keep the life policy remained inforceable

Which of the following statement about the preparation before meeting a client is correct?


A		Inform the client documents to be used in the meeting, such as insurance policies and tax receipts

B		Do not draft discussion topics for the meeting so that the client may speak freely

C		The client's office should be the best venue for the meeting

D		A relaxing outdoor atmosphere should be the best venue for the meeting

Which of the following statements about the value of a call option at expiration is FALSE?


A		A short position in call option will result in a loss if the stock price exceeds the exercise price.

B		The value of a long position equals zero or the stock price minus the exercise price, whichever is higher.

C		The value of a long position equals zero or the exercise price minus the stock price, whichever is higher.

D		A short position in a call option has a zero value for all stock prices equal to or less than the exercise price.

Which of the following statement is the best description about ethics?


A		Ethics is absolutely an individual issue

B		Ethical standards are defined by law

C		There are a lot of grey areas in ethical standards

D		The law should be the highest requirement of ethical conducts

According to the separation property of James Tobin, the sequence of portfolio decision should be:


A		First optimal risky portfolio choice on efficient frontier, then personal choice on security market line based on personal risk aversion

B		First optimal personal portfolio choice on efficient frontier, then risky portfolio choice on capital allocation line based on personal risk aversion

C		First optimal risky portfolio choice on efficient frontier, then personal choice on capital allocation line based on personal risk aversion

D		First optimal risky portfolio choice on efficient frontier, then personal choice on security characteristic line based on personal risk aversion

The risk-free rate is 4%. The expected market rate of return is 11%. If you expect stock X with a beta of .8 to offer a rate of return of 12 percent, then you should __________.


A		buy stock X because it is overpriced

B		buy stock X because it is underpriced

C		sell short stock X because it is overpriced

D		sell short stock X because it is underpriced

Which of the following statements related to “Tobin’s q ratio” is correct?


A		Tobin’s q ratio should be equal to 1 in long run

B		Tobin’s q ratio adopts charting analysis on common stock price

C		Tobin’s q ratio uses “expected future cash flows” of the company to find the stock price.

D		Tobin’s q ratio is work with Price-to-Earning ratio to value the common stock price

Mr. Au Yeung let out his property to Miss Lee on 1 June 2005 with the following terms:

1. Lease period: 1 June 2005 to 31 May 2007
2. Monthly rental: HK$20,000 payable in advance
3. Premium: HK$480,000
4. Mr. Au Yeung is liable to pay rates and the amount of rates paid for the period 1 June 2005 to 31 March 2006 was HK$8,000

The amount of net assessable value for Mr. Au Yeung for the year of assessment 2005/06 is:


A		HK$105,600

B		HK$313,600

C		HK$324,000

D		None of the above

Q10

Which of the following risk can be eliminated in a diversified portfolio?


A		Market risk

B		Unique risk

C		Systematic risk

D		Liquidity risk