Free Sample Question

China Stock Markets

Which of the following statements are CORRECT regarding mainland China stock markets?

A shares traded on the Shanghai Stock Exchange are purchased by local Chinese investors and settled in RMB
B shares traded on the Shanghai Stock Exchange are purchased by foreign investors and settled in RMB
All shares traded on the Shenzhen Stock Exchange are settled in HKD
B shares traded on the Shenzhen Stock Exchange are settled in HKD

I and II only

I and IV only

I, II, III and IV

III and IV only

Exchange Participants

Which of the following is INCORRECT regarding Stock Exchange Participants (EPs)?

EPs must pay a variety of charges to the Stock Exchange of Hong Kong and the Hong Kong Securities Clearing Company

EPs must hold shares in Hong Kong Exchange and Clearing Limited

Only EPs can access the Orion Trading Platform

An EP must be incorporated

Broker Responsibilities

Jonny Wu is a Hong Kong securities broker. Which ONE of the following is NOT one of his broker responsibilities?

He must enter into a client agreement before providing any services to a client

He must establish a client’s identity and retain a copy of the identity document

If client securities are to be pledged, he must obtain written authority from the client beforehand

He must contribute to the Investor Compensation Fund

Option Break Even

What is the break-even stock price of a long call position with a strike price of HK$50 and an option premium of HK$5?

HK$45

HK$50

HK$55

HK$60

Clearing Statements

Clearing Participants receive a Provisional Clearing Statement on the trade day for reconciliation through their CCASS terminals. When do they receive the Final Clearing Statement?

T+1

T+2

T+3

T+4

Dividend Growth Model

Booker Industries has just paid a dividend of $11. If the dividend is expected to grow at 3% per year for the foreseeable future, and investors require a 15% rate of return, what is the stock’s expected price?

$75.53

$91.66

$94.42

$103.88