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2024 AFM 121 Final Exam New Latest Exam Best Studying Material Updated Recent Version with Questions and Answers

2024 AFM 121 Final Exam New Latest Exam Best  Studying Material Updated Recent Version with  Questions and Answers

2024 AFM 121 Final Exam New Latest Exam Best
Studying Material Updated Recent Version with
Questions and Answers
What do bond prices do immediately after a coupon payment? ---------- Correct Answer -
-------- When the bond price is greater than the face value, it trades above par (coupon
rate> YTM)
When a bond price is equal to the face value, it trades at par, (coupon rate= YTM)
When a bond price is less than the face value, it trades below par (coupon rate < YTM)
What can you tell me about the behaviour of individual investors? ---------- Correct
Answer --------- -investors don't diversify portfolios enough
-capital asset pricing model (CAPM) explains that the performance of a stock is
dependent on how volatile it is (how risky it is)
-over confidence bias (trying to pick and choose winners, losers)
-individual behaviour & market prices (buy the market, exchange traded funds that
tracks overall markets on low cost basis)
what are some examples of unethical behaviours in capital markets ---------- Correct
Answer ---------- - deceiving the public
- misleading a BOD
- assuring no risk
- violating statutes
when is insider trading allowed ---------- Correct Answer ---------- if insiders such as CEO,
director etc, file reports on their trading activity and disclose any necessary information
to public

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