Module 6 Notes : Topic 1

SIDC - Module 6 Past Year Question with Answer

1-1-6 (1-4-page 11)

Question 1

Which of the following describe the activities of stockbroking companies?

1. To take orders from clients to buy and sell securities
2. To underwrite new issues of securities
3. To research and report on the listed companies and their securities
4. To facilitate payment and settlement of securities by clients

1. (i) and (ii) only
2. (i) and (iii) only
3. (iii) and (iv) only
4. All of the above

1-1-8 (1-1-page 2)

Question 2

‘Securities’ is the general term used to describe financial instruments which are:

1. marketable or saleable in the marketplace
2. evidence of ownership or debt
3. interest bearing or dividend paying instruments
4. physical commodities that are traded in financial markets

1. (ii) and (iv) only
2. (i) and (iii) only
3. (i), (ii) and (iii) only
4. (ii), (iii) and (iv) only

Total Questions : 60
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SIDC - Module 7 Important Topics 2013

Topic 1:
1. Elements of Annual Report
2. Users of Financial Statements
3. Accounting Assumptions & Concepts ( 3-4 Questions )
4. Categories of Audit Report

Topic 2:
1. Depreciation: Straight line & Reducing balance
2. Goodwill - when recognized
3. Inventory Days, Debtor Days
4. Categories of Cash Flow sources (Operating, Investing, Financing)
5. Subsidiary & Associate (% of ownership) - scenario

Topic 3:
1. Benchmarks
2. Business life cycle - what stage, and when in x stage, what does it imply
3. Ratios - About 10-15 questions calculation and hypothetical (change in x
result in increase/decrease of x ratio)

Topic 4:
1. Risks in bond investment - reinvestment risk
2. Money market instruments - commercial paper
3. Bonds
- Pricing a bond
- Relationship between bond price, required yield and coupon rate
- inflation rate impact on interest rate and bond yield
4. Interest Rate theories - Expectation Theory
5. Time value of money
- Annuity definition, features
- Discount rate: CAPM
- Use of PV Factor tables to find answer (about 3 questions)

Topic 5:
1. CULS, RCULS, ICULS, RULS - know the difference
2. Book value per share
3. Discounted cash flow model
4. Constant growth dividend model, Gordon growth model - features and
assumptions
5. Liquidation value - definition

Topic 6:
1. Risks of ETFs ( 2 Questions )