CHAPTER 1: STOCK MARKET OVERVIEW
•
Define the concept and function of financial markets.
•
Identify securities and their characteristics.
•
Identify the function of the stock market in the economy.
•
Understand Participants in the stock market and their roles; and the operating
principles of the stock market and stock indexes
Multiple-choice Questions
1. What does the term "financial markets" refer to?
a) The transaction of goods and services
b) Currency transactions
c) Financial asset transactions
d) Real estate transactions
2. What are the main characteristics of securities?
a) Ability to generate regular income
b) Issued by the bank
c) Ability to vote at the general meeting of shareholders
d) Ability to increase price and generate profit for holders
3. What is the main objective of the stock market in the economy?
a) Generate passive income for investors
b) Provide capital for businesses
c) Generate the highest market value
d) Creates a constant variation in prices
4. Who are the main participants in the stock market?
a) Government and banks
b) Large companies and corporations
c) Individual and institutional investors
d) Investment banks
5. What is the main principle of trading in the stock market?
a) Safety principles
b) Principles of transparency and fairness
c) Principle of monopoly
d) Principle of fraud
6. Voting certificates in the general meeting of shareholders are usually:
a) Preference Stock
b) Common Stock
c) Bonds (Bonds)
d) Options
7. What is the main function of the stock exchange?
a) Provide payment services
b) Ensuring market transparency
c) Securities trading brokerage
d) Provide financial information
8. What organizational structure of the stock exchange has individual shareholders
involved in management and operation?
a) Central trading floor
b) Member trading floor
c) Stock exchange
d) Bond trading floor
9. What are stock indexes commonly used for?
a) Evaluate the performance of companies
b) Predict market movements
c) Determining the value of securities
d) Measure the rate of return on a security
10. In the stock market, what is the effect of improving the liquidity of securities?
a) Help generate great profits for investors
b) Reduce the risk of loss for investors
c) Creating conditions for listed companies to increase share prices
d) Increases the value of the stock index
CHAPTER 2: TYPES OF SECURITIES IN THE MARKET
•
Define stocks and understand their characteristics.
•
Distinguish between different classes of stocks.
•
Understand bonds, their characteristics and classification.
•
Analyze the yield and risk of bonds and the factors that affect bond prices.
•
Recognizing Funds Trading Fund Certificates and derivative securities.
•
Understanding stock options, stock warrants, futures, options.
Multiple-choice Questions
1. What are shares in the stock market?
a) Voting certificate in the general meeting of shareholders
b) Certificate of participation in an investment fund
c) Shares are ownership of a part of the capital of the issuing enterprise
d) Voting certificate participating in shareholder's voting rights
2. What are the characteristics of preference shares?
a) No voting rights in the general meeting of shareholders
b) Having voting rights but no preemptive rights to profits
c) Having the right of priority in profits but no voting rights
d) Has both voting rights and prerogative of profits
3. What are bonds in the stock market?
a) Voting certificate to participate in the general meeting of shareholders
b) Certificate of participation in an investment fund
c) A bond is a company loan from an investor
d) Certificate of participation in future investment fund
4. How is the yield on a bond calculated?
a) Interest rate of the State Bank
b) Percentage of bond interest on total bond value
c) The annual rate of interest on the bond's value
d) Current market interest rate
5. What affects bond prices?
a) Market interest rate
b) Financial position of the bond issuer
c) Cash flow from operating activities
d) All of the above options
6. What are Warrants?
a) The certificate represents the buyer's right to buy shares
b) Voting certificate to participate in the general meeting of shareholders
c) Certificate of participation in future investment fund
d) Certificate showing shareholder's voting rights
7. What do Futures Contracts involve?
a) A contract to buy and sell securities in the future at a specified price
b) Contract to buy and sell existing securities at a fixed price
c) Contract to buy and sell securities in the future at market price
d) Contract to buy and sell current securities at market price
8. What is an option contract?
a) An agreement that allows a buyer to buy or sell a security at a specified price in the
future
b) A contract to buy and sell securities at a fixed price at the present time
c) An agreement to buy and sell securities at a future market price
d) Contract to buy and sell securities at the current market price
9. What is a Fund Certificate Trading Fund?
a) Fund invested in securities
b) Funds for investment in construction projects
c) Future investment fund
d) Regular investment fund
10. What do Derivative Securities involve?
a) Contracts to buy and sell securities in the future
b) Current securities purchase and sale agreement
c) Contracts to buy and sell securities and their derivative financial products
d) Contracts to buy and sell securities and options contracts from them
CHAPTER 3: SECURITIES EXCHANGE
•
Understand the concept of a stock exchange and its functions.
•
Understanding the forms of ownership of the stock exchange; organizational structure
and operating mechanism of the stock exchange.
•
Get to know the types of members on the stock exchange.
•
Understand the trading system of the stock exchange.
Multiple-choice Questions
1. What is the function of the stock exchange in the financial system?
a) Facilitating the easy trading of securities
b) Asset management of enterprises
c) Performing accounting activities for listed companies
d) Generate profits for investors
2. The organizational structure of a stock exchange includes which components?
a) Securities companies and listed companies
b) Securities companies and members on the floor
c) Listed companies and members on the exchange
d) Listed companies and participating banks
3. Which member participates in securities trading activities directly on the exchange?
a) Listed companies
b) Securities companies
c) Individual investors
d) All of the above options
4. What is the trading system of the stock exchange?
a) Procedures for checking the quality of securities before listing
b) Methods of securities trading among investors
c) Rules for accepting listed companies on the exchange
d) Operation mechanism of securities companies
5. What is the main purpose of the live trading system on the exchange?
a) Increase in the value of the security
b) Facilitating quick participation in securities trading
c) Control the number of listed securities
d) Ensure transparency and fairness in transactions
6. What is the function of the stock exchange in the financial system?
a) Management of listed companies
b) Ensure transparency in business activities
c) Facilitating securities trading among investors
d) Control the circulation of securities in the market
7. The organizational structure of a stock exchange includes which components?
a) Listed companies and securities companies
b) Securities companies and investors
c) Listed companies and members participating in transactions
d) Listed companies and participating banks
8. What guarantees does the trading system of the stock exchange offer investors?
a) The ability to generate high profits
b) Transparency and fairness in the transaction process
c) An increase in the price of a security
d) Stability of the stock market
9. Which member participates in securities trading activities directly on the exchange?
a) Securities companies
b) Listed companies
c) Individual investors
d) Banks participating in the transaction
10. For the stock exchange, which system's goal is to facilitate fast and efficient trading?
a) Direct trading system
b) Pricing system
c) Automated payment and transaction systems
d) Securities listing system
CHAPTER 4: SECURITIES DESERVATION, REGISTRATION AND PAYMENT
SYSTEM
•
Understand the concept and function of securities registration, depository and
settlement systems.
•
Understand the workings of securities registration, depository and settlement systems
and how they work.
•
Identify the role of the securities settlement system in the stock market.
Multiple-choice Questions
1. What is the main function of the securities registration, depository and settlement
system?
a) Facilitating direct securities trading
b) Manage the list of listed companies
c) Manage and ensure transparency in securities registration, depository and payment
d) Develop operating principles of the stock exchange
2. What activities does the securities registration, depository and settlement system
perform?
a) Securities trading between investors
b) Manage the list of listed companies
c) Manage and update information about securities and investors
d) Evaluate the performance of companies listed on the stock market
3. What is the main role of the securities settlement system in the stock market?
a) Ensuring transparency and fairness in securities trading
b) Facilitating the registration and depository of securities
c) Ensure the payment of money and securities is done efficiently and securely
d) Manage the list of listed companies
4. What are the operating principles of the securities registration, depository and
payment system?
a) Confidentiality, transparency and efficiency
b) Trading, investing and analyzing
c) Management, valuation and inspection
d) Markets, securities and principles
5. Which system ensures transparency and safety in making payments and securities
trading?
a) Securities trading system
b) Securities registration, depository and payment system
c) Management system of listed enterprises
d) Securities market information system
6. What is the function of the securities registration, depository and settlement system in
the stock market?
a) Ensuring transparency and fairness in securities trading
b) Manage the list of listed companies
c) Determine the value of the security
d) Providing stock market information
7. What activities does the securities registration, depository and settlement system
perform?
a) Securities trading between investors
b) Manage the list of listed companies
c) Manage and update information about securities and investors
d) Evaluate the performance of companies listed on the stock market
8. What is the main role of the securities settlement system in the stock market?
a) Ensuring transparency and fairness in securities trading
b) Facilitating the registration and depository of securities
c) Ensure the payment of money and securities is done efficiently and securely
d) Manage the list of listed companies
9. What are the operating principles of the securities registration, depository and
payment system?
a) Confidentiality, transparency and efficiency
b) Trading, investing and analyzing
c) Management, valuation and inspection
d) Markets, securities and principles
10. Which system ensures transparency and safety in making payments and securities
trading?
a) Securities trading system
b) Securities registration, depository and payment system
c) Management system of listed enterprises
d) Securities market information system
CHAPTER 5: SECURITIES COMPANY
•
Define a securities company and understand its functions.
•
Understand professional ethics and prohibited actions for stockbrokers.
•
Identify models of securities trading organizations.
Multiple-choice Questions
1. What is the function of a securities company in the stock market?
a) Conduct securities transactions between investors
b) Manage the list of listed companies
c) Providing stock market information
d) Ensuring security for securities transactions
2. What is the purpose of professional ethics and prohibition for stockbrokers?
a) Ensuring transparency and fairness in securities trading
b) Protecting the interests of listed companies
c) Ensure transparency and fairness in the management of the securities list
d) Protect the interests of investors and ensure transparency in securities transactions
3. What types of stock trading organization models are included?
a) Centralized organization and decentralized organization
b) International and domestic organizations
c) Government organizations and private organizations
d) Listing organization and listing organization at the same time
4. To ensure transparency and fairness in securities trading, what principles should a
securities company follow?
a) Financial principles and technical principles
b) Principles of management and principles of fairness
c) Principles of risk management and principles of transparency
d) Principles of professional ethics and legal principles
5. To ensure transparency in the management of the securities list, what activities should
a securities company perform?
a) Provide stock market information
b) Securities trading between investors
c) Manage and update information about securities and investors
d) Evaluate the performance of companies listed on the stock market
6. In the stock market, the decentralized securities trading organization model applies to
which cases?
a) The market for issuing new securities
b) Stock exchange market
c) Bond trading market
d) Futures trading market
7. What does the professional ethics of a securities company involve?
a) Ensuring safety for securities transactions
b) Protecting the interests of listed companies
c) Ensuring transparency and fairness in securities trading
d) Manage and update information about securities and investors
8. Financial principles in the operation of securities companies related to what?
a) Risk management
b) Manage and update information about securities and investors
c) Ensuring transparency and fairness in securities trading
d) Ensuring security for securities transactions
9. What is the main purpose of the principles of professional ethics in the stock market?
a) Protect the interests of investors
b) Ensuring transparency and fairness in securities trading
c) Ensuring transparency and fairness in the management of the securities list
d) Protecting the interests of listed companies
10. Which model of securities trading organization applies to the case of a centralized
exchange?
a) The exchange has many participants
b) The exchange has only one participant
c) The trading floor has the participation of many securities companies
d) Decentralized trading floor
CHAPTER 6: SECURITIES INVESTMENT FUND AND FUND MANAGEMENT
COMPANY
•
Define mutual funds and understand their benefits.
•
Awareness of the role and importance of investment funds in the stock market.
•
Understand the types of stock investment funds and their classifications.
•
Define the fund management company and its organizational structure.
Multiple-choice Questions
1. How is a stock investment fund defined?
a) Securities investment fund is a fund that invests in many different types of assets besides
securities.
b) Securities investment fund is an open-ended fund with large capital scale to invest in
stocks and bonds.
c) Securities investment fund is a fund that mobilizes capital from individual and
institutional investors to invest in securities.
d) Securities investment fund is a fund managed by the government and invests in listed
enterprises.
2. What is the main role of a stock exchange fund in the stock market?
a) Generate good returns for individual investors.
b) Support listed companies to grow financially.
c) Ensure transparency and fairness in securities transactions.
d) Create diversity and spread risks in securities investment.
3. Which of the following assets can a mutual fund invest in?
a) Can only invest in shares.
b) Can only invest in bonds.
c) Can only invest in bank deposits.
d) Can invest in stocks, bonds and other assets.
4. How is a fund management company defined?
a) Fund management company is a company specializing in providing securities trading
brokerage services.
b) Fund management company is a company listed on the stock market.
c) Fund management company means a company that manages and invests in securities
investment funds.
d) Fund management company is a financial consulting company for listed companies.
5. The organizational structure of a fund management company includes which of the
following departments?
a) Accounting department and marketing department.
b) Risk management department and market analysis department.
c) Transaction office and portfolio management office.
d) Human Resources Department and Project Management Department.
6. What is the main purpose of setting up a stock investment fund?
a) Generate maximum profit for the founder of the fund.
b) Create conditions for individual investors to invest in the stock market.
c) Focus on investing in a specific type of stock.
d) Creating diversity in securities investment and risk management.
7. What types of stock mutual funds invest in fixed-weight stocks and bonds?
a) Stock funds.
b) Bond fund.
c) Combined fund.
d) Cash fund.
8. What are the types of securities investment funds by investment object?
a) Corporate funds and personal funds.
b) Open-ended funds and closed-end funds.
c) Structured fund and unstructured fund.
d) Growth fund and profit generating fund.
9. In a stock investment fund, what form do individual investors usually participate in?
a) Establish a separate fund.
b) Buy shares directly from the business.
c) Buy shares through corporate funds.
d) Buy shares through the general fund.
10. What is the main task of the fund management company?
a) Generate maximum profit for the company's shareholders.
b) Organizing seminars on securities investment.
c) Manage and invest in securities investment funds according to specific strategies.
d) Providing financial consulting services for businesses.
CHAPTER 7: ISSUANCE AND LISTING OF SECURITIES
•
Understand the concept of securities issuance and their classification.
•
Understand the conditions and procedures for issuing public securities.
•
Get to know about securities warranties and auctions.
•
Definition of stock listing, objectives and advantages/disadvantages of listing.
Multiple-choice Questions
1. What is a public issue of securities?
a) The process of securities trading on the market.
b) The process of distributing securities to the public through auction.
c) The process of ensuring the safety of securities in the warehouse.
d) The process of buying securities from large investors.
2. What are the basic conditions for a company to issue public securities?
a) The company must be highly profitable.
b) The company must have a large investment capital.
c) The company must have talented leaders.
d) The company must have a clear business and financial plan.
3. What is a stock auction?
a) The process of selling securities at a stable price.
b) The process of buying securities from the highest bidder.
c) The process of buying securities from the lowest bidder.
d) The process of distributing securities to the public through auction.
4. What is stock listing?
a) The process of distributing securities to the public through auction.
b) The process of ensuring the safety of securities in the warehouse.
c) The process of buying securities from the lowest bidder.
d) The process of securities being recorded and traded on the exchange.
5. What are the main advantages of stock listing?
a) Increase stock value and ensure profits for investors.
b) Create conditions for the company to attract capital and create liquidity for shares.
c) Creating diversity in securities investment.
d) Create conditions for investors to buy stock right certificates.
6. What is a security guarantee?
a) The process of protecting securities from financial risks.
b) The process of increasing the value of securities through transactions on the floor.
c) The process of protecting the interests of retail investors.
d) The process of facilitating the company to list shares.
7. What is the main goal of stock listing?
a) Create conditions for companies to develop business plans.
b) Create conditions for investors to buy stock right certificates.
c) Create conditions for the company to attract capital and create liquidity for shares.
d) Facilitating the quick trading of securities.
8. What is one of the advantages of stock listing?
a) Create conditions for investors to buy stock right certificates.
b) Create conditions for the company to increase the value of shares.
c) Creating diversity in securities investment.
d) Facilitating the quick trading of securities.
9. During the stock auction, what will the lowest bidder get?
a) Buy securities at the price they suggest.
b) Loss of ability to participate in auction.
c) Buy securities at the price of the highest bidder.
d) Received a free amount of securities.
10. What are the main advantages of stock auctions?
a) Create competition among listed companies.
b) Ensure that all securities are purchased by investors.
c) Create conditions for the lowest bidder to buy securities.
d) Increase the value of securities through transactions on the floor.
CHAPTER 8: SECURITIES TRADING
•
Understand the process and risks of trading securities on the over-the-counter market.
•
Understand the trading system on the stock exchange, including order types and
trading methods.
Multiple-choice Questions
1. What risks does the process of trading securities on the free market bring to investors?
a) Risk of capital loss.
b) The risk of not being able to buy and sell securities.
c) The risk of not being able to determine the exact value of the security.
d) Risk of not being able to find a stockbroker.
2. What does the trading system on the stock exchange include?
a) Types of securities traded and how they are valued.
b) Securities companies participating in transactions and regulations on transaction fees.
c) How to classify securities on the market.
d) Methods of distributing securities to investors.
3. What type of stock trading order requires an immediate buy or sell at the current
market price?
a) Market Order (Market Order).
b) Limit Order.
c) Price pending order (Stop Order).
d) Conditional Order.
4. Which securities trading order requires buying or selling at a price not higher (for buy
orders) or not lower (for sell orders) a certain price?
a) Market Order (Market Order).
b) Limit Order.
c) Price pending order (Stop Order).
d) Conditional Order.
5. A stock trade order that is set to buy or sell when the price reaches a certain price (a
buy order turns into a market order when the price goes up, or a sell order turns into a
market order when the price goes down) )?
a) Market Order (Market Order).
b) Limit Order.
c) Price pending order (Stop Order).
d) Conditional Order.
6. What trading method allows an investor to place an order to buy or sell a security at a
price relatively close to the current market price, but only execute the trade when the
security's price approaches the previous set price?
a) Market Order (Market Order).
b) Limit Order (Limit Order).
c) Price pending order (Stop Order).
d) Conditional Order (Conditional Order).
7. When trading securities on the floor, investors have to pay a certain fee to whom?
a) For securities companies.
b) To the broker.
c) For the stock exchange.
d) To the seller of securities.
8. Which trading method allows an investor to place an order to buy or sell a security on
the condition that the trade is only executed when the security price reaches a certain
price?
a) Market Order (Market Order).
b) Limit Order (Limit Order).
c) Price pending order (Stop Order).
d) Conditional Order (Conditional Order).
9. What type of trading allows an investor to place an order to buy or sell a security and
only execute the trade when the security's price reaches a predetermined price?
a) Market Order (Market Order).
b) Limit Order (Limit Order).
c) Price pending order (Stop Order).
d) Conditional Order (Conditional Order).
10. What trading method allows an investor to buy or sell securities at the current market
price, regardless of the specific price?
a) Market Order (Market Order).
b) Limit Order (Limit Order).
c) Price pending order (Stop Order).
d) Conditional Order (Conditional Order).
CHAPTER 9: SECURITIES VALUATION
•
Understand the methods of analysis and valuation of stocks, bonds, derivatives.
•
Quiz Understand the factors that affect stock prices in the market.
Multiple-choice Questions
1. Which valuation method relies on calculating the present value of all expected future
cash flows from an asset or project and comparing this with the present value of the
asset?
a) Comparables Method.
b) Discounted Cash Flow Method.
c) P/E method (Price-to-Earnings Method).
d) NAV (Net Asset Value Method) method.
2. In stock analysis, what is the Price-to-Earnings Method (P/E) used to measure?
a) Net worth.
b) Average profit.
c) Profitability ratio.
d) Profit margin.
3. Which valuation method is based on a comparison of current stock prices with those
of listed companies in the same industry?
a) Comparables Method.
b) Discounted Cash Flow Method.
c) P/E method (Price-to-Earnings Method).
d) NAV (Net Asset Value Method) method.
4. In bond analysis, which factor greatly affects the interest rate of a bond?
a) The market value of the bond.
b) The maturity of the bond.
c) P/E ratio of the bond issuer.
d) Market interest rate requirements.
5. In derivatives analysis, what are futures contracts used for?
a) Make sure that the stock price does not increase more than a certain level.
b) Buy or sell securities at a fixed price in the future.
c) Guarantee that the security will increase in price in the future.
d) Guarantee higher returns than common securities.
6. Technical analysis in stock valuation based on what?
a) Predictions on global economic factors.
b) Historical data on price and trading volume.
c) Financial forecast of the enterprise.
d) Technological characteristics of the enterprise.
7. In stock analysis, what is the P/E (Price-to-Earnings) ratio?
a) The ratio between the market value of the company and the value of the company's assets.
b) The ratio between the market value and the profit of the company.
c) Ratio between market value and total revenue of the company.
d) Ratio between market value and number of outstanding shares of the company.
8. When valuing securities using the discounted cash flow method, what is important in
determining the appropriate discount rate?
a) The stock's expected rate of return.
b) The company's debt ratio.
c) Number of floating shares.
d) Market value of the stock.
9. In bond analysis, what does the term "yield to maturity" refer to?
a) The actual rate of return that the investor earns from holding the bond to maturity.
b) The bond's rate of growth over time.
c) Current market interest rate.
d) Profit margin ratio of the bond issuer.
10. Fundamental analysis in stock valuation is based on what factors?
a) Historical data on price and trading volume.
b) The market value of the company.
c) Economic, financial and operational factors of the company.
d) Asset value of the company.
MID-TERM TEST 1
1. A bond with a face value of $1,000 and a coupon rate of 6% has 5 years left to
maturity. If the yield to maturity is 7%, what is the bond's price?
$959
2. A bond has a face value of $1,000, a coupon rate of 5%, and 10 years left to maturity.
If the yield to maturity is 6%, what is the bond's price?
$926.40
3. A bond has a face value of $1,000, a coupon rate of 8%, and a yield to maturity of
7%. If it has 10 years left to maturity, what is the bond's price?
$1,070.24
4. A bond with a face value of $1,000, a coupon rate of 4%, and a yield to maturity of
5% has 30 years left to maturity. What is the bond's price?
$846.28
5. A bond has a face value of $1,000, a coupon rate of 6%, and a yield to maturity of
7%. If it has 25 years left to maturity, what is the bond's price?
$883.46
6. Company DEF issued a bond with a face value of $1,000, a coupon rate of 4%, and a
maturity of 8 years. If the required rate of return is 5%, what is the estimated bond
price?
$935.37
7. Company LMN issued a bond with a face value of $1,000, a coupon rate of 6%, and a
maturity of 12 years. If the required rate of return is 8%, what is the estimated bond
price?
$849.28
8. Company BCD issued a bond with a face value of $1,000, a coupon rate of 4.5%, and
a maturity of 12 years. If the required rate of return is 6%, what is the estimated bond
price?
$874.24
9. Company ABC issued a bond with a face value of $1,000, a coupon rate of 8%, and a
maturity of 30 years. If the required rate of return is 9%, what is the estimated bond
price?
$897.26
10. Company XYZ issued a zero-coupon bond with a face value of $1,000 and a maturity
of 25 years. If the required rate of return is 7%, what is the estimated bond price?
$184.25
11. Company GHI has a dividend per share of $1.50 and a dividend growth rate of 8%. If
the required rate of return is 12%, what is the estimated stock price using the Discount
Dividend Model?
$40.50
12. Company BCD has earnings per share (EPS) of $3.00 and a price-to-earnings (P/E)
ratio of 22. If the industry average P/E ratio is 18 and the industry average EPS is
$2.80, what is the estimated stock price using the P/E ratio method?
$66.00
13. A trader buys a call option on XYZ stock with a strike price of $50. The premium
paid is $5, and the market price of XYZ stock at expiration is $55. What is the trader's
profit or loss?
$0
14. A trader sells a put option on ABC stock with a strike price of $75. The premium
received is $8, and the market price of ABC stock at expiration is $80. What is the
trader's profit or loss?
$8
15. A trader sells a put option on a currency pair with a strike price of $1.50. The
premium received is $0.75, and the market price of the currency pair at expiration is
$1.55. What is the trader's profit or loss?
$0.75
16. A trader buys a call option on a stock index with a strike price of 3,000. The premium
paid is $50, and the market price of the stock index at expiration is 3,050. What is the
trader's profit or loss?
$0
17. A trader buys a call option on a stock index with a strike price of 4,000. The premium
paid is $60, and the market price of the stock index at expiration is 4,100. What is the
trader's profit or loss?
$40
18. A trader sells a put option on a commodity with a strike price of $120. The premium
received is $15, and the market price of the commodity at expiration is $115. What is
the trader's profit or loss?
$10
19. The initial margin required to enter into a futures contract is primarily used for:
Guaranteeing performance of the contract
20. In option contract, long put option is
Buyer in the contract of selling the underlying asset
21. A trader enters into a futures contract on a stock index with a contract multiplier of
$250. If the contract price is 3,500 and the trader closes the position at 3,600, what is
the trader's profit or loss?
$25,000 profit
22. A trader buys a cocoa futures contract at $2,200 per metric ton and later sells it at
$2,150 per metric ton. If each contract represents 20 metric tons, what is the trader's
profit or loss?
$1,000 loss
23. A trader sells a Eurodollar futures contract at an interest rate of 2.5% and later buys it
back at an interest rate of 3%. If the contract value is $1,000,000 and the contract
duration is 90 days, what is the trader's profit or loss?
$1,250 loss
24. A trader enters into a futures contract on a stock with a contract multiplier of 500. If
the contract price is $50 and the trader closes the position at $55, what is the trader's
profit or loss?
$25,000 profit
25. The daily settlement price for a futures contract is $200,000, and the contract value is
$150,000. If a trader has a short position, what is their profit or loss?
$50,000 loss
26. A trader buys a coffee futures contract at $1.50 per pound and later sells it at $1.75
per pound. If each contract represents 37,500 pounds, what is the trader's profit or
loss?
$9,375 profit
27. ABC Company has an expected dividend of $2.00 per share, and the dividends are
expected to grow at a rate of 8% annually for the next three years. After that, the
growth rate will decrease to 4% annually indefinitely. If the required rate of return is
12%, what is the stock's price?
$35.95
28. DEF Corporation has reported the following historical dividends per share: Year 1:
$1.50, Year 2: $1.75, Year 3: $2.00. The dividends are expected to grow at a rate of
3% annually. If the required rate of return is 6%, what is the stock's price?
$62.31
29. XYZ Corporation has an expected dividend of $3.50 per share, and the dividends are
expected to grow at a rate of 6% annually for the next four years. After that, the
growth rate will decrease to 3% annually indefinitely. If the required rate of return is
15%, what is the stock's price?
$35.39
30. The coupon rate of a bond is:
The annual interest payment divided by the face value
31. Bond ratings provided by credit rating agencies reflect:
The bond's creditworthiness and default risk
32. The term "discount bond" refers to a bond that:
Sells below its face value
33. A bond's current yield is calculated as:
The coupon rate divided by the bond's market price
34. What is the function of options for corporations?
Providing employees with stock-based incentives
35. How do swaps benefit investors?
Providing a way to hedge against interest rate risks
36. Which of the following best describes a swap agreement?
An agreement to exchange one currency for another at a specified exchange rate
37. What is the function of a bond for investors?
Generating regular interest payments
38. Which of the following is an example of a derivative contract?
Stock option to purchase shares of a tech company
39. Which of the following is a key function of forward contracts for corporations?
Hedging against foreign exchange risks
40. Which of the following is an example of a swap?
Exchanging fixed and floating interest rate payments with another party
MID-TERM TEST 2
Question 1
CLC Inc. has issued 6 types of bonds with the following characteristics:
No.
Coupon
Rate (%)
CLC-1
CLC-2
CLC-3
CLC-4
CLC-5
CLC-6
12
8
0
10
15
0
Number of
payment each
year( times)
2
4
0
1
2
0
Maturity
(year)
20
15
12
18
10
5
Issuance
Date
20/12/2010
25/01/2012
15/06/2014
01/01/2012
15/06/2010
31/12/2015
Face
YTM
value
(%)
(USD)
1,000
10
1,000
10
100,000
15
100,000
10
10,000
12
10,000
12
i. Arrange the bonds issued by CLC Inc in ascending order of credit risk.
CLC-3: AAA
CLC-4: A
CLC-1: BBB
CLC-5: BBBCLC-2: BB
CLC-6: B+
ii. Determine the valuation of 6 types of bonds issued by the company on the issuance date
and on June 25, 2023.
CLC-1
•
On issuance date:
•
(!()!* $ +
!"% . !&&&
Po= (
).
!"%
"
!"% %$.$"
+
$
!&&&
!"%
(!* $ )$.$"
= 1171.59 USD
On June 25, 2023
Price of the bond on 25/06/2023 -> 15 periods 5 days
C’= C .
!&&&
= ( 12% .
).
= 0.82/2 = 0.41
./"
./-
PV= 60 . (
!() !* !"%
$ +
!"%
$
CLC-2
•
On issuance date
•
0% .!&&& !()!* ) +
Po=
.
!"%
1
!"% %!(.)
)
%!(
+
+
!&&&
)!* !"%
+
$
!&&&
)!*!"%
+
)
!( + 0.41 = 1104.21 𝑈𝑆𝐷
!(.) = 845.45 𝑈𝑆𝐷
On June 25, 2023
Price of the bond on 25/06/2023 ->15 periods 60 days
Credit
rating
(S&P)
BBB
BB
AAA
A
BBBB+
ð 𝐶2 = 𝐶 .
/&
/&
.."3
= 20 .
=
= 0.82
././1
!"% %!(
0% .!&&& !( )!* ) +
PV=
.
!"%
1
)
CLC-3
•
•
!( + 𝐶
)!* !"%
+
)
2 = 941.38 𝑈𝑆𝐷
(!*!-%)
On June 25, 2023
Price of the bond on 25/06/2023 -> 9 years
ð N=12-9=3
ð f = TCS/D = 10/365
CLC-4
!&&&&&
𝑥 (1 + 15%)4 = 66,003.88 𝑈𝑆𝐷
(!*!-%)*
On issuance date
Po= (10% . 100000) .
•
•
!&&&
On issuance date
!&&&&&
Po=
!$ = 18,690 . 72 . 100
PV=
•
+
!((!*!&%)%!+
!&&&&&
+
= 100000 𝑈𝑆𝐷
!&%
(!*!&%)!,
On June 25, 2023
Price of the bond on 25/06/2023 -> 7 period 175 days
!5C’= 10000 .
= 4,794.52
./-
PV= (10% . 100000)
CLC-5
!(( !*!&%)%!&&&&&
+
+ 4,794.52 = 104,794.52 𝑈𝑆𝐷
!&%
(!*!&%)-
•
On issuance date
•
!&&&& (!() !* $ +
Po= (15% .
).
!$%
"
!$% %$.!"
$
+
!&&&&
!"% $.!"
)!* $ +
= 11,720.49 𝑈𝑆𝐷
On June 25, 2023
We have: from 15/06/2010 to 25/06/2023 = 26 periods and 10 days. While the matunity is 20
periods. Therefore, the valuation of the CLC-5 bond on June 25, 2023 is inappropiate.
CLC-6
•
On issuance date
Po=
•
•
!&&&&
= 5674.27 𝑈𝑆𝐷
(!*!"%)(
On June 25, 2023
We have: from 31/12/2015 to 25/06/2023 = 26 7 years 175 days. While the matunity is 5
years. Therefore, the valuation of the CLC-6 bond on June 25, 2023 is inappropiate.
iii. Among the 6 types of bonds mentioned above, which bond would you choose for
investment? Why?
Reject: CLC-6 and CLC-2 due to high risk and low coupon payment
Accept: CLC-3 ( low risk); CLC-4 (low return and risk); CLC-5(high return); CLC-1(
moderate return and risk)
Question 2
CLC Investment Fund has an investment portfolio (total value: 120 billion VND) of the
following stocks:
Industry
Stock
P/E
ratio
EPS
(VND)
Market
price
(VND)
Steel
Technology
Banking
Education
Medicine
Real Estate
STL
TCN
BAK
EDU
MED
REA
20
15
12
18
10
32
4,000
2,800
3,200
1,800
4,500
5,000
28,500
75,600
105,200
32,450
63,300
14,150
Dividend Required Dividend
(VND)
Rate of
Payout
Return
Ratio
(%)
(%)
1,000
10
60
1,200
10
40
2,000
15
40
800
10
30
3,800
12
60
1,500
12
20
Portfolio
Weight
(%)
22
15
18
10
21
14
i. Identify which stocks are trading undervalued, overvalued, and at par value using the P/E
valuation method.
•
STL stock
P/E ratio =
6789: ;:7 <=>7:
?6@
ð Price per share = P/E ratio . EPS= 20 . 4000= 80000
Market price < Price per share
•
•
•
•
•
ð STL stock is trading undervalued
TCN stock
Price per share = 15 . 2800 = 42000
Market price > price per share
ð TCN stock is trading overvalued
BAK stock
Price per share = 12 . 3200= 38400
Market price > price per share
ð BAK stock is trading overvalued
EDU stock
Price per share = 18 . 1800= 32400
Market price > price per share
ð EDU stock is trading overvalued
MED stock
Price per share= 10 . 4500 = 45000
Market price > price per share
ð MED stock is trading overvalued
REA stock
Price per share= 32 . 5000 = 160000
Market price < price per share
ð REA stock is trading overvalued
ii. According to the reports from various companies:
•
STL will increase its dividend payout by 5% for 3 years, then increase it to 7% for 2
years, and maintain stable growth at 8%.
Do= 1000
D1= 1000 (1+5%)=1050
D2= 1000 (1 + 5%)" = 1102,5
D3= 1000 (1 + 5%). = 1157,63
D4=1000 (1 + 5%). (1 + 7%) = 1238,66
D5= 1000 (1 + 5%).( 1 + 7%)" = 1325,36
D6= 1000 (1 + 5%).( 1 + 7%)"( 1 + 8%) = 1431,39
PV= 48,843.44
•
TCN will increase its dividend payout by 8% for 3 years, then decrease it to 7% for 4
years, and maintain stable growth at 5%.
Do= 1200
D1= 1200 (1+8%)=1296
D2= 1200 (1 + 8%)" = 1399,68
D3= 1200 (1 + 8%). = 1511,65
D4=1200 (1 + 8%). (1 + 7%) = 1617,47
D5= 1200(1 + 8%).( 1 + 7%) " = 1730,69
D6= 1200(1 + 8%).( 1 + 7%) . = 1851,84
D7= 1200(1 + 8%).( 1 + 7%) 1 = 1981,47
D8= 1200 (1 + 8%).( 1 + 7%)1( 1 + 5%) =2080,54
P7=
A0
= 41,610.8
7(B
ð PV= 29,065.08
•
BAK will increase its dividend payout by 10% for 5 years, then increase it to 12% for
2 years, and maintain stable growth at 15% for the remaining years.
Do= 2000
D1= 2000 (1+10%)=2200
D2= 2000 (1 + 10%)" = 2420
D3= 2000 (1 + 10%). = 2662
D4=2000 (1 + 10%)1 = 2928,2
D5= 2000(1 + 10%)- = 3221,02
D6= 2000(1 + 10%)- ( 1 + 12%) = 3607,5
D7= 2000(1 + 10%)-( 1 + 12%)" = 4040,5
D8= 2000 (1 + 10%)- ( 1 + 12%)"( 1 + 15%) =4646,5
P7=
𝐷8
= 30976,67 è P0 = 23492.72
•
EDU will increase its dividend payout by 3% for 2 years, then increase it to 5% for 2
years, and maintain stable growth at 6% per year.
𝑟
Do= 800
D1= 800 (1+3%)=824
D2= 800 (1 + 3%)" = 848,72
D3= 800 (1 + 3%)" + (1 + 5%) = 891,16
D4=800 (1 + 3%)" + (1 + 5%)" = 935,86
D5= 800(1 + 3%)" ( 1 + 5%). = 991,86
P4= 24,796.42
ð PV= 19,695.45
•
MED will increase its dividend payout by 8% for 3 years, then increase it to 9% for 5
years, and maintain stable growth at 5%.
Do= 3800
D1= 3800 (1+8%)=4104
D2= 3800 (1 + 8%)" = 4432,32
D3= 3800 (1 + 8%). = 4786,91
D4=3800 (1 + 8%). (1 + 9%) = 5215,73
D5= 3800(1 + 8%). (1 + 9%)" = 5687,32
D6= 3800(1 + 8%). (1 + 9%). = 6199,18
D7= 3800(1 + 8%).( 1 + 9%) 1 = 6757,11
D8= 3800 (1 + 8%).( 1 + 9%)- =7365,25
D9= 3800 (1 + 8%).( 1 + 9%)-(1 + 5%) = 7733,51
P8= 110,478.71
ð PV= 70,940.48
•
REA will increase its dividend payout by 7% for 4 years, then increase it to 9% for 6
years, and maintain stable growth at 8%.
Do= 1500
D1= 1500 (1+7%)=1605
D2= 1500 (1 + 7%)" = 1717,45
D3= 1500 (1 + 7%). = 1837,56
D4=1500 (1 + 7%)1 = 1966,19
D5= 1500(1 + 7%)1(1 + 9%) = 2143,15
D6= 1500(1 + 7%)1 (1 + 9%)" = 2336,04
D7= 1500(1 + 7%)1( 1 + 9%) . = 2546,28
D8= 1500 (1 + 7%)1( 1 + 9%)1 =2775,44
D9= 1500 (1 + 7%)1( 1 + 9%)- = 3025,23
D10= 1500 (1 + 7%)1 ( 1 + 9%)/ =3297,5
D11= 1500 (1 + 7%)1 ( 1 + 9%)/ (1 + 8%) = 3561,3
P10= 89,032.61
ð PV= 40,850.67
iii. Identify which stock generates the highest return for the CLC investment portfolio and
provide an explanation.
ROI = Return on Investment = Net Profit / Total Investment
Using EPS as Net Profit; and Total Investment = Total Investment Fund Value * Each stock
Portfolio Weight.
èThe best is REA stock with 298 ROI ratio
Question 3
Closing price of CLC and MXD shares on HOSE on July 22 was 38,450 VND and 5,110
VND respectively.
In the periodic trading session opened on July 23, there were the following orders:
Buy Order
3000
2000
3000
4000
5000
6000
1000
1000
2000
3000
4000
5000
6000
Price - CLC
ATO
40.125
39.650
40.160
41.150
38.500
37.850
40.150
32.250
35.400
36.250
37.780
34.150
Sell Order
2000
1000
4000
500
1000
3000
2000
2000
1000
4000
500
1000
3000
Sell Order
4000
1000
3000
4000
5000
6000
10000
1000
2000
3000
4000
5000
6000
Price - MXD
ATO
5.210
5.420
5.460
4.560
4.760
4.752
5.511
5.122
5.050
4.910
4.980
4.880
Buy Order
2000
1000
4000
500
1000
3000
12000
2000
1000
4000
500
1000
3000
i. What is the invalid order of the above 2 stocks? Calculate the ceiling and floor prices on
May 23 of those stocks above
CLC - ceiling = 41,100 ; Floor= 35,800
MXD - ceiling = 5,460 ; Floor= 4,760
ii. Calculating order matching price and matching volume at the opening session?
The matching price is 38,500 with 7500 matching volume for CLC
The matching price is 4,880 with 16000 matching volume for MXD
iii. What is the total buying and selling volume?
Total Buy is 13000 and Total Sell is 7500 for CLC
Total Buy is 16000 and Total Sell is 16000 for MXD
iv. At the end of the periodic session, an investor places a limit sell order of 45,250 VND 5000 for CLC shares and 5,250 VND - 1000 for MXD shares, what is the matching price?
CLC is invalid order and MXD is not match due to higher than matching price
Question 4
During the continuous trading session, orders were placed for CLC stock as follows:
Time
9:16
9:17
9:18
Order
T1
T2
T3
Buy
Sell
Price
Price
Volume
Volume
(1000đ)
(1000đ)
45
1000
46
2000
44
3000
9:19
9:20
9:21
9:22
9:30
9:45
10:10
10:20
10:21
10:35
11:15
11:29
11:45
T4
T5
T6
T7
T8
T9
T10
T11
T12
T13
T14
T15
T16
43
46
MP
42
47
MP
48
52
55
45
4000
MP
21000
50
49
MP
500
2000
1500
MP
48
MP
MP
2000
2000
3000
1000
4000
10000
1000
1000
500
1000
2000
10000
1000
i. Calculate the matching prices and the matching volume
ii. Which MP order is left over and converted to LO at what price?
1 T1.B
2 T6.B
T4.S
T4.S
45
45
1000 S.3000
3000 B.7000
3 T6.B
4 T6.B
T2.S
T7.MP.S
46
46
2000 B.5000
5000 S.16000
5 T3.B
6 T5.B
T7.MP.S
T7.MP.S
44
43
3000 S.13000
4000 S.9000
T7.MP.S CHANGE TO T7.S AT 42.950 WITH 9000
7 T8.MP.B
8 T11.B
T7.S
T11.MP.S
42.95
42
1000 S.8000
1000 S.500
T11.MP.S CHANGE TO T11.S AT 41.950 WITH 500
9 T12.B
T11.S
10 T13.MP.B T13.MP.S
11
12
13
14
41.95
41.95
500
0
1000 S.1000
T13.MP.S CHANGE TO T13.S AT 41.900 WITH 1000
T14.B
T13.S
41.9
1000 B.1000
T14.B
T7.S
42.95
1000 S.7000
T15.B
T15.MP.S
52
3000 B.7000
T15.B
T7.S
42.95
7000
0
REMAIN T9 AT 50 WITH 500; T10 AT 49 WITH 2000; T14 AT
48 WITH 2000
ORDER T16 IS OUT OF TIME,
REJECTED
Question 5:
You are a famous investor, consultant and financial planner in the market. Today you meet
02 customers with the following information:
•
•
Client 01 is a young woman (29 years old) with a need for asset growth and financial
freedom at the age of 50.
Client 02 is a middle-aged male (55 years old) who wants to stabilize his income and
prepare for retirement as well as spend time traveling.
You will advise on how to finance these two clients so that they can achieve their personal
goals.
DEPEND ON YOUR VIEWPOINT AND RECOMMENDATIONS