WHICH OF THE FOLLOWING IS NOT A FUNCTION OF THE SPECIALIST?

04 May WHICH OF THE FOLLOWING IS NOT A FUNCTION OF THE SPECIALIST?

Which of the following is not a function of the specialist?

Answer

Assists the Federal Reserve in controlling the money supply

Acts as a broker who handles the limit orders or special orders placed with member brokers

Buys and sells securities in order to stabilize the market

Acts as a dealer in assigned stocks to maintain a fair and orderly market

Question 15

All of the following are characteristics of a dealer market except:

Answer

Also referred to as a quote-driven market

NASDAQ market is a dealer market

Individual dealers buy and sell shares for themselves

Centralized trading location

Question 16

A block trade is one which involves a minimum of

Answer

1,000 shares.

5,000 shares.

10,000 shares.

100,000 shares.

1,000,000 shares.

Question 17

The implication of efficient capital markets and a lack of superior analysts have led to the introduction of

Answer

Balanced funds.

Naive funds.

January funds.

Index funds.

Futures options.

Question 18

Fama and French examined the relationship between the Book Value to Market Value ratio and average stock returns and found

Answer

No evidence of a relationship for U.S. stocks.

Evidence of a negative relationship in U.S. stocks only.

Evidence of a positive relationship for Japanese stocks only.

Evidence of a negative relationship for U.S. and Japanese stocks.

Evidence of a positive relationship for U.S. and Japanese stocks.

Question 19

The results of studies that have looked at the relationship between PEG ratios and subsequent stock returns

Answer

Find an inverse relationship, with annual rebalancing.

Find no relationship, with monthly or quarterly rebalancing.

Find an inverse relationship, with monthly or quarterly rebalancing.

Find a direct relationship, with monthly or quarterly rebalancing.

Find a direct relationship with annual rebalancing

Question 20

A “runs test” on successive stock price changes which supports the efficient market hypothesis would show the actual number of runs

Answer

Falls into the range expected of a random series.

Falls into the range expected of a dependent series.

Is small.

Is large.

Would approximate N/2.

Question 21

A portfolio manager is considering adding another security to his portfolio. The correlations of the 5 alternatives available are listed below. Which security would enable the highest level of risk diversification?

Answer

0.0

0.25

−0.25

−0.75

1.0

Question 22

Between 1980 and 2000, the standard deviation of the returns for the NIKKEI and the DJIA indexes were 0.08 and 0.10, respectively, and the covariance of these index returns was 0.0007. What was the correlation coefficient between the two market indicators?

Answer

.0906

.0985

.0796

.0875

.0654

Question 23

Between 1994 and 2004, the standard deviation of the returns for the S&P 500 and the NYSE indexes were 0.27 and 0.14, respectively, and the covariance of these index returns was 0.03. What was the correlation coefficient between the two market indicators?

Answer

1.26

0.7937

0.2142

0.1111

0.44

Question 24

All of the following are common risk measurements except

Answer

Standard deviation

Variance

Semivariance

Covariance

Range of returns

Question 25

If an individual owns only one security the most appropriate measure of risk is:

Answer

Standard deviation