RIFT VALLEY UNIVERSTY METEHARA CAMPUS
FACULTS OF BUSINESS AND ECONOMIC
DEPARTMENT OF ACCOUNTING 4TH YEAR 2ND SEMS
FILL UP ALL THE NECESSARY INFORMATION IN THE SPACE PROVIDED BELOW
VISIBLY IN CAPITAL ONLY.
NAME: - _________________ IDNO________DEPARTMENT______________ YEAR__________
Course instructor: - Rare Roba
Course title: - Investment and portfolio management
Time allow: 1hours.
Weight 40%
Type of Exam: - Final
Division: - Weekend
Note: - Any attempt of cheating or try to copying from other will awarded your point is F
PART 1: - Say true if the statement is correct and say false if the statement incorrect. Each of the
question loading 1.5 points
1. The prices of government and corporate bonds are determined by the level of interest
rates.
2. The stock prices reflect the expectations of earnings, dividends, and interest rates.
3. While increases in the growth rate of the money supply have consistently preceded
economic expansions.
4. The secondary market is that part of the capital markets that deals with the issue of new
securities.
5. Primary markets create long term instruments through which corporate entities borrow
from capital market.
6. Declines in the rate of growth of the money supply have headed business contractions.
7. The primary market is the market where the securities are sold for the second time.
8. Seasoned equity issues are old shares offered by firms that already have stock
outstanding.
9. The primary market, also known as the aftermarket.
10. The relationship among inflation, interest rates, and stock prices is not direct and
consistent.
Part II. Choose the best answer for the following question. Each question loading 1.5 points
1. The secondary market, also known as ----------------
A. Aftermarket B. Bond market C. Primary market D. All
2. From the following which one is the specific macro-analysis topics except -------
A. The business cycle and industry sectors
B. Structural economic changes and alternative industries
C. Evaluating an industry’s life cycle
D. Peak business cycle
3. -------------need to carefully study demographic trends and project their effect on different
industries.
A. Industry analyst’s B. Market analysis C. Consumer behaviors D. All
4. The over-the-counter (OTC) market is --------------- exchange.
A. Formal B. not formal C. A and B D. All
5. All are the structural economic change and alternative industries except ---------------
A. Demographic B. Technology C. Politics and Regulation D. mature growth
6. ---------------- is generally negative for stocks because it causes higher market interest rates and
more uncertainty about future prices and costs.
A. Higher inflation B. Peak business cycle C. During a recession D. None
7. Sometimes individual investors are called -------------.
A. Individual investors B. Institution investors C. Retail investors D. All
8. All are the challenges of technical analysis except-----------
A. Assumptions of Technical Analysis B. Technical Trading rules C. A and B D. None
9. From the following which one is the security market encompasses:
A. Equity market B. Bond market C. Derivatives market D. All
10. ---------------- are almost always sold through a negotiated arrangement with an investment
banking firm that maintains a relationship with issuing firm.
A. Government bonds B. Corporate stock issue C. Corporate bond issues D. No answer
PART III Matching each question loading 1 points
A B
1. Treasury notes A. It means selling it to investors
2. Primary market B. In addition to issuing fixed-income securities
3. Origination C. Corporate bond issue
4. Distribution D. Original maturities 2 to 10 years
5. Corporate stock issues E. It involves the design of the bond issue and initial
F. Capital market that deals with issue of new securities
PART IV Writing essay
1. Why secondary markets are important? (2 points)
2. Write at list 2 the underwriting function? (2 points)
3. What is the primary market? (1 points)
