CMFAS Securities Products M2 2

Question 1

What is the yield of a bond?

Accepted Answer

The return an investor earns on the bond, expressed as a percentage

Answer

The face value of the bond

Answer

The maturity date of the bond

Answer

The credit rating of the issuer

Question 2

What is a rights issue?

Accepted Answer

An offer to existing shareholders to buy additional shares at a discounted price

Answer

A legal dispute

Answer

A type of government bond

Answer

A mandatory share buyback

Question 3

What is the price-to-earnings (P/E) ratio?

Accepted Answer

The price of a share divided by earnings per share

Answer

The price of a share divided by its dividend

Answer

The total revenue of a company

Answer

The book value of a company

Question 4

What is a warrant?

Accepted Answer

A derivative that gives the holder the right to buy shares at a predetermined price

Answer

A type of savings account

Answer

A government regulation

Answer

A type of mutual fund

Question 5

What does 'market capitalisation' mean?

Accepted Answer

The total market value of a company's outstanding shares

Answer

The total revenue of a company

Answer

The number of employees in a company

Answer

The amount of debt a company has

Question 6

What is a corporate bond?

Accepted Answer

A bond issued by a company to raise capital

Answer

A bond issued by the government

Answer

A type of equity share

Answer

A bank fixed deposit