ICMA FMFQ Exam Questions Instant Access - No Installation Required

Question 1

Which of the following statements in NOT true of money market products?

AMoney market products are typically less than a year to maturity

BMoney market products can be either interest bearing or discount instruments

CMoney market products are only issued by banks

DMoney market products cover a range of credit risk from credit risk free to sub-investment grade

Answer : C

Question 2

You hold a call option on a stock with a strike of EUR 35. The current premium for this option is EUR 3.80 and the underlying stock is trading at EUR 32. How much of this option price represents time value?

ANone as the option is in-the-money

BEUR 3.80

CEUR 3.00

DEUR 0.80

Answer : B

Question 3

A company issues a share that has a par value of 100.00 and pays a fixed dividend of 2.0% annually? What type of share is this?

AOrdinary share

BCumulative share

CDeferred share

DPreference share

Answer : D

Question 4

One of the most contentious parts of the US Dodd-Franks Act is the restrictions placed on banks carrying trading positions. What is the name of the rule that deals with this?

ABernanke Rule

BGreenspan Rule

CYellan Rule

DVolckerRule

Answer : D

Question 5

As a company moves through its industry lifecycle, toward maturity, how is this most likely to affect an equity analyst's perception of its growth rate for equity valuation?

AAnalysts do not consider a growth rate in equity valuation

BIt will have no impact

CIt is likely to increase the expected growth rate

DIt is likely to decrease the expected growth rate

Answer : D

Question 6

Which of the following statements is true of dividend payments in the equity market?

AAll equities pay dividends

BDividend rates are pre-determined at the launch of the equity

CManagement determines the level of dividend payment in each period

DIf a company does not pay a dividend one year then this skipped dividend becomes a liability on the company's balance sheet

Answer : C

Question 7

You have bought a call option on a stock at a strike of EUR 29, and paid a premium of EUR 1.5 for this option. What is your breakeven price on this position?

AEUR 27.50

BEUR 29.00

CEUR 30.50

DEUR 32.00

Answer : C

ICMA Financial Markets Foundation Qualification FMFQ Exam Questions