Asset Management Exam Bank
Course Introduction
Asset Management explores the theories, principles, and practices involved in effectively managing and optimizing an organizations assets for maximum value and performance. The course covers key topics such as asset lifecycle management, strategic planning, risk assessment, valuation, portfolio management, and regulatory considerations. Students will gain an understanding of how physical, financial, and intangible assets are acquired, operated, maintained, and disposed of within both public and private sector contexts. Through case studies and practical applications, the course equips learners with analytical tools and decision-making skills necessary for developing asset management strategies that align with organizational objectives and ensure sustainable growth.
Recommended Textbook
Investments 9th Edition by Zvi Bodie
Available Study Resources on Quizplus 28 Chapters
2307 Verified Questions
2307 Flashcards
Source URL: https://quizplus.com/study-set/2926
Page 2
Chapter 1: The Investment Environment
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/58320
Sample Questions
Q1) A debt security pays ____________.
A)a fixed level of income for the life of the owner
B)a variable level of income for owners on a fixed income
C)a fixed or variable income stream at the option of the owner
D)a fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security
E)none of the above
Answer: D
Q2) Discuss the similarities and differences between real and financial assets.
Answer: Real assets represent the productive capacity of the firm, and appear as assets on the firm's balance sheet. Financial assets are claims against the firm, and thus appear as liabilities on the firm's balance sheet. On the other hand, financial assets are listed on the asset side of the balance sheet of the individuals who own them. Thus, when financial statements are aggregated across the economy, the financial assets cancel out, leaving only the real assets, which directly contribute to the productive capacity of the economy. Financial assets contribute indirectly only.
Q3) Discuss securitization as it relates to the field of investments.
Answer: Securitization refers to aggregating underlying financial assets, su
To view all questions and flashcards with answers, click on the resource link above. Page 3
Chapter 2: Asset Classes and Financial Instruments
Available Study Resources on Quizplus for this Chatper
87 Verified Questions
87 Flashcards
Source URL: https://quizplus.com/quiz/58319
Sample Questions
Q1) Which of the following is not a mortgage-related government or government sponsored agency?
A)The Federal Home Loan Bank
B)The Federal National Mortgage Association
C)The U.S.Treasury
D)Freddie Mac
E)Ginnie Mae
Answer: C
Q2) The smallest component of the money market is
A)repurchase agreements
B)small-denomination time deposits
C)savings deposits
D)money market mutual funds
E)commercial paper
Answer: B
To view all questions and flashcards with answers, click on the resource link above.
Page 4
Chapter 3: How Securities are Traded
Available Study Resources on Quizplus for this Chatper
74 Verified Questions
74 Flashcards
Source URL: https://quizplus.com/quiz/58318
Sample Questions
Q1) You want to purchase XON stock at $60 from your broker using as little of your own money as possible.If initial margin is 50% and you have $3000 to invest,how many shares can you buy?
A)100 shares
B)200 shares
C)50 shares
D)500 shares
E)25 shares
Answer: A
Q2) You want to purchase IBM stock at $80 from your broker using as little of your own money as possible.If initial margin is 50% and you have $2000 to invest,how many shares can you buy?
A)100 shares
B)200 shares
C)50 shares
D)500 shares
E)25 shares
Answer: C
To view all questions and flashcards with answers, click on the resource link above.
5
Chapter 4: Mutual Funds and Other Investment Companies
Available Study Resources on Quizplus for this Chatper
71 Verified Questions
71 Flashcards
Source URL: https://quizplus.com/quiz/58317
Sample Questions
Q1) A mutual fund had year-end assets of $250,000,000 and liabilities of $4,000,000.There were 3,750,000 shares in the fund at year-end.What was the mutual fund's Net Asset Value?
A)$92.53
B)$67.39
C)$63.24
D)$65.60
E)$17.46
Q2) Which of the following would increase the net asset value of a mutual fund share,assuming all other things remain unchanged?
A)An increase in the number of fund shares outstanding
B)An increase in the fund's accounts payable
C)A change in the fund's management
D)An increase in the value of one of the fund's stocks
E)none of the above
Q3) Discuss the taxation of mutual fund income.
Q4) List and describe the more important types of mutual funds according to their investment policy and use.
To view all questions and flashcards with answers, click on the resource link above. Page 6
Chapter 5: Introduction to Risk,return,and the Historical Record
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/58316
Sample Questions
Q1) If a portfolio had a return of 15%,the risk free asset return was 3%,and the standard deviation of the portfolio's excess returns was 34%,the risk premium would be _____.
A)31%
B)18%
C)49%
D)12%
E)29%
Q2) An investment provides a 2% return semi-annually,its effective annual rate is A)2%.
B)4%.
C)4.02%.
D)4.04%.
E)none of the above.
Q3) What is the expected standard deviation for the stock?
A)2.07%
B)9.96%
C)7.04%
D)1.44%
E)None of the above
Page 7
To view all questions and flashcards with answers, click on the resource link above.
Chapter 6: Risk Aversion and Capital Allocation to Risky Assets
Available Study Resources on Quizplus for this Chatper
73 Verified Questions
73 Flashcards
Source URL: https://quizplus.com/quiz/58315
Sample Questions
Q1) According to the mean-variance criterion,which of the statements below is correct? \[\begin{array} { l l l }
\text { Investment } & \mathrm { E } ( \mathrm { r } ) & \text { Standard Deviation } \\
\mathrm { A } & 10 \% & 5 \% \\ \mathrm {~B} & 21 \% & 11 \% \\ \mathrm { C } & 18 \% & 23 \% \\ \mathrm { D } & 24 \% & 16 \%
\end{array}\]
A)Investment B dominates Investment A.
B)Investment B dominates Investment C.
C)Investment D dominates all of the other investments.
D)Investment D dominates only Investment B.
E)Investment C dominates investment A.
Q2) Discuss the characteristics of indifference curves,and the theoretical value of these curves in the portfolio building process.
Q3) In the utility function: U = E(r)- [-0.005As<sup>2</sup>],what is the significance of "A"?
To view all questions and flashcards with answers, click on the resource link above.
Page 8
Chapter 7: Optimal Risky Portfolios
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/58314
Sample Questions
Q1) The expected rates of return of stocks A and B are _____ and _____,respectively.
A)13.2%; 9%
B)13%; 8.4%
C)13.2%; 7.7%
D)7.7%; 13.2%
E)none of the above
Q2) Portfolio theory as described by Markowitz is most concerned with:
A)the elimination of systematic risk.
B)the effect of diversification on portfolio risk.
C)the identification of unsystematic risk.
D)active portfolio management to enhance returns.
E)none of the above.
Q3) The risk-free portfolio that can be formed with the two securities will earn _____ rate of return.
A)9.5%
B)10.4%
C)10.9%
D)9.9%
E)none of the above
To view all questions and flashcards with answers, click on the resource link above. Page 9
Chapter 8: Index Models
Available Study Resources on Quizplus for this Chatper
86 Verified Questions
86 Flashcards
Source URL: https://quizplus.com/quiz/58313
Sample Questions
Q1) The intercept in the regression equations calculated by beta books is equal to A) in the CAPM
B) + rf(1 + )
C) + rf(1 - )
D)1 -
E)none of the above
Q2) The single-index model
A)greatly reduces the number of required calculations,relative to those required by the Markowitz model.
B)enhances the understanding of systematic versus nonsystematic risk.
C)greatly increases the number of required calculations,relative to those required by the Markowitz model.
D)A and B.
E)B and C.
Q3) Discuss the advantages of the single-index model over the Markowitz model in terms of numbers of variable estimates required and in terms of understanding risk relationships.
Q4) Discuss the security characteristic line (SCL).
To view all questions and flashcards with answers, click on the resource link above. Page 10
Chapter 9: The Capital Asset Pricing Model
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/58312
Sample Questions
Q1) A security has an expected rate of return of 0.10 and a beta of 1.1.The market expected rate of return is 0.08 and the risk-free rate is 0.05.The alpha of the stock is
A)1.7%.
B)-1.7%.
C)8.3%.
D)5.5%.
E)none of the above.
Q2) Your opinion is that security A has an expected rate of return of 0.145.It has a beta of 1.5.The risk-free rate is 0.04 and the market expected rate of return is 0.11.According to the Capital Asset Pricing Model,this security is
A)underpriced.
B)overpriced.
C)fairly priced.
D)cannot be determined from data provided.
E)none of the above.
Q3) Discuss how the CAPM might be used in capital budgeting decisions and utility rate decisions.
Q4) List and discuss two of the assumptions of the CAPM.
To view all questions and flashcards with answers, click on the resource link above.
Page 11
Chapter 10: Arbitrage Pricing Theory and Multifactor Models
of Risk and Return
Available Study Resources on Quizplus for this Chatper
79 Verified Questions
79 Flashcards
Source URL: https://quizplus.com/quiz/58311
Sample Questions
Q1) The ____________ provides an unequivocal statement on the expected return-beta relationship for all assets,whereas the _____________ implies that this relationship holds for all but perhaps a small number of securities.
A)APT, CAPM
B)APT, OPM
C)CAPM, APT
D)CAPM, OPM
E)none of the above
Q2) Consider the single factor APT.Portfolio A has a beta of 0.5 and an expected return of 12%.Portfolio B has a beta of 0.4 and an expected return of 13%.The risk-free rate of return is 5%.If you wanted to take advantage of an arbitrage opportunity,you should take a short position in portfolio _________ and a long position in portfolio _________.
A)A, A
B)A, B
C)B, A
D)B, B
E)none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 12
Chapter 11: The Efficient Market Hypothesis
Available Study Resources on Quizplus for this Chatper
69 Verified Questions
69 Flashcards
Source URL: https://quizplus.com/quiz/58310
Sample Questions
Q1) ___________ the return on a stock beyond what would be predicted from market movements alone.
A)An irrational return is
B)An economic return is
C)An abnormal return is
D)A and B
E)A and C
Q2) If you believe in the reversal effect,you should
A)sell bonds in this period if you held stocks in the last period.
B)sell stocks in this period if you held bonds in the last period.
C)sell stocks this period that performed well last period.
D)go long.
E)C and D
Q3) Why might the degree of market efficiency differ across various markets? State three reasons why this might occur and explain each reason briefly.
Q4) Discuss the various forms of market efficiency.Include in your discussion the information sets involved in each form and the relationships across information sets and across forms of market efficiency.Also discuss the implications for the various forms of market efficiency for the various types of securities' analysts.
To view all questions and flashcards with answers, click on the resource link above. Page 13
Chapter 12: Behavioral Finance and Technical Analysis
Available Study Resources on Quizplus for this Chatper
166 Verified Questions
166 Flashcards
Source URL: https://quizplus.com/quiz/58309
Sample Questions
Q1) In the context of the Capital Asset Pricing Model (CAPM)the relevant measure of risk is
A)unique risk.
B)beta.
C)standard deviation of returns.
D)variance of returns.
E)none of the above.
Q2) Your opinion is that security A has an expected rate of return of 0.145.It has a beta of 1.5.The risk-free rate is 0.04 and the market expected rate of return is 0.11.According to the Capital Asset Pricing Model,this security is A)underpriced.
B)overpriced.
C)fairly priced.
D)cannot be determined from data provided.
E)none of the above.
Q3) List and discuss two of the assumptions of the CAPM.
Q4) Discuss how the CAPM might be used in capital budgeting decisions and utility rate decisions.
Q5) Discuss the mutual fund theorem.
To view all questions and flashcards with answers, click on the resource link above. Page 14
Chapter 13: Empirical Evidence on Security Returns
Available Study Resources on Quizplus for this Chatper
56 Verified Questions
56 Flashcards
Source URL: https://quizplus.com/quiz/58308
Sample Questions
Q1) In the empirical study of a multi-factor model by Chen,Roll,and Ross,a factor that appeared to have significant explanatory power in explaining security returns was________.
A)the change in the expected rate of inflation
B)the risk premium on corporate bonds
C)the unexpected change in the rate of inflation
D)industrial production
E)B,C and D
Q2) The Fama and French three factor model uses ___,___,and ___ as factors.
A)industrial production, term spread, default spread
B)industrial production, inflation, default spread
C)firm size, book-to-market ratio, market index
D)firm size, book-to-market ratio, default spread
E)none of the above
Q3) Benchmark error
A)refers to the use of an incorrect market proxy in tests of the CAPM.
B)can result in inconclusive tests of the CAPM.
C)can result in incorrect evaluation measures for portfolio managers.
D)A and B.
E)A,B,and C.
To view all questions and flashcards with answers, click on the resource link above. Page 15
Chapter 14: Bond Prices and Yields
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/58307
Sample Questions
Q1) Consider two bonds,A and B.Both bonds presently are selling at their par value of $1,000.Each pays interest of $120 annually.Bond A will mature in 5 years while bond B will mature in 6 years.If the yields to maturity on the two bonds change from 12% to 10%,____________.
A)both bonds will increase in value,but bond A will increase more than bond B
B)both bonds will increase in value,but bond B will increase more than bond A
C)both bonds will decrease in value,but bond A will decrease more than bond B
D)both bonds will decrease in value,but bond B will decrease more than bond A
E)none of the above
Q2) Of the following four investments,________ is considered the safest.
A)commercial paper
B)corporate bonds
C)U.S.Agency issues
D)Treasury bonds
E)Treasury bills
Q3) If you are buying a coupon bond between interest paying dates,is the amount you would pay to your broker for the bond more or less than the amount quoted in the financial quotation pages? Discuss the differences and how these differences arise.
To view all questions and flashcards with answers, click on the resource link above. Page 16
Chapter 15: The Term Structure of Interest Rates
Available Study Resources on Quizplus for this Chatper
67 Verified Questions
67 Flashcards
Source URL: https://quizplus.com/quiz/58306
Sample Questions
Q1) Bond stripping and bond reconstitution offer opportunities for ______,which can occur if the _________ is violated.
A)arbitrage; Law of One Price
B)arbitrage; restrictive covenants
C)huge losses; Law of One Price
D)huge losses; restrictive covenants
E)B and D
Q2) The value of a Treasury bond should
A)be equal to the sum of the value of STRIPS created from it.
B)be less than the sum of the value of STRIPS created from it.
C)be greater than the sum of the value of STRIPS created from it.
D)A or B
E)B or C
Q3) What is the price of a 2-year maturity bond with a 10% coupon rate paid annually? (Par value = $1,000)
A)$1,092
B)$1,054
C)$1,000
D)$1,073
E)none of the above
To view all questions and flashcards with answers, click on the resource link above. Page 17
Chapter 16: Managing Bond Portfolios
Available Study Resources on Quizplus for this Chatper
84 Verified Questions
84 Flashcards
Source URL: https://quizplus.com/quiz/58305
Sample Questions
Q1) Which of the following is true?
A)Holding other things constant,the duration of a bond decreases with time to maturity.
B)Given time to maturity,the duration of a zero-coupon increases with yield to maturity.
C)Given time to maturity and yield to maturity,the duration of a bond is higher when the coupon rate is lower.
D)Duration is a better measure of price sensitivity to interest rate changes than is time to maturity.
E)C and D.
Q2) A substitution swap is an exchange of bonds undertaken to
A)change the credit risk of a portfolio.
B)extend the duration of a portfolio.
C)reduce the duration of a portfolio.
D)profit from apparent mispricing between two bonds.
E)adjust for differences in the yield spread.
Q3) Discuss rate anticipation swaps as a bond portfolio management strategy.
To view all questions and flashcards with answers, click on the resource link above.
18
Chapter 17: Options Markets: Introduction
Available Study Resources on Quizplus for this Chatper
80 Verified Questions
80 Flashcards
Source URL: https://quizplus.com/quiz/58321
Sample Questions
Q1) GDP refers to _________.
A)the amount of personal disposable income in the economy
B)the difference between government spending and government revenues
C)the total manufacturing output in the economy
D)the total production of goods and services in the economy
E)none of the above
Q2) The "normal" range of price-earnings ratios for the S&P500 Index is
A)between 2 and 10.
B)between 5 and 15.
C)less than 8.
D)between 12 and 25.
E)greater than 20.
Q3) Investors can ______ invest in an industry with the highest expected return by purchasing ______.
A)most easily; industry-specific iShares
B)not; industry-specific iShares
C)most easily; industry-specific ADRs
D)not; individual stocks
E)none of the above
To view all questions and flashcards with answers, click on the resource link above.
Page 19
Chapter 18: Option Valuation
Available Study Resources on Quizplus for this Chatper
129 Verified Questions
129 Flashcards
Source URL: https://quizplus.com/quiz/58304
Sample Questions
Q1) The most appropriate discount rate to use when applying a FCFE valuation model is the ___________.
A)required rate of return on equity
B)WACC
C)risk-free rate
D)A or C depending on the debt level of the firm
E)none of the above
Q2) _______ is the amount of money per common share that could be realized by breaking up the firm,selling the assets,repaying the debt,and distributing the remainder to shareholders.
A)Book value per share
B)Liquidation value per share
C)Market value per share
D)Tobin's Q
E)None of the above
Q3) The price/earnings ratio,or multiplier approach,may be used for stock valuation.Explain this process and describe how the "multiplier" varies from the one available in the stock market quotation pages.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 19: Futures Markets
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/58303
Sample Questions
Q1) Refer to the financial statements of Snapit Company.The firm's fixed asset turnover ratio for 2009 is _____.
A)4.60
B)3.61
C)3.16
D)5.46
E)none of the above
Q2) A firm has a lower quick (or acid test)ratio than the industry average,which implies
A)the firm has a lower P/E ratio than other firms in the industry.
B)the firm is less likely to avoid insolvency in the short run than other firms in the industry.
C)the firm may be more profitable than other firms in the industry.
D)A and B.
E)B and C.
Q3) Publicly traded firms must prepare audited financial statements according to generally accepted accounting principles (GAAP).How do comparability problems arise?
To view all questions and flashcards with answers, click on the resource link above.
21
Chapter 20: Futures, swaps, and Risk Management
Available Study Resources on Quizplus for this Chatper
105 Verified Questions
105 Flashcards
Source URL: https://quizplus.com/quiz/58302
Sample Questions
Q1) The current market price of a share of MOT stock is $24.If a call option on this stock has a strike price of $24,the call
A)is out of the money.
B)is in the money.
C)is at the money.
D)A and C.
E)B and C.
Q2) A protective put strategy is
A)a long put plus a long position in the underlying asset.
B)a long put plus a long call on the same underlying asset.
C)a long call plus a short put on the same underlying asset.
D)a long put plus a short call on the same underlying asset.
E)none of the above.
Q3) A call option on a stock is said to be at the money if
A)the exercise price is higher than the stock price.
B)the exercise price is less than the stock price.
C)the exercise price is equal to the stock price.
D)the price of the put is higher than the price of the call.
E)the price of the call is higher than the price of the put.
Q4) List three types of exotic options and describe their characteristics.
Page 22
To view all questions and flashcards with answers, click on the resource link above.
Chapter 21: Macroeconomic and Industry Analysis
Available Study Resources on Quizplus for this Chatper
90 Verified Questions
90 Flashcards
Source URL: https://quizplus.com/quiz/58301
Sample Questions
Q1) A put option has an intrinsic value of zero if the option is
A)at the money.
B)out of the money.
C)in the money.
D)A and C.
E)A and B.
Q2) If the hedge ratio for a stock call is 0.50,the hedge ratio for a put with the same expiration date and exercise price as the call would be ________.
A)0.30
B)0.50
C)-0.60
D)-0.50
E)-.17
Q3) At expiration,the time value of an at the money call option is always
A)positive.
B)equal to zero.
C)negative.
D)equal to the stock price minus the exercise price.
E)none of the above.
To view all questions and flashcards with answers, click on the resource link above.
Page 23
Chapter 22: Equity Valuation Models
Available Study Resources on Quizplus for this Chatper
91 Verified Questions
91 Flashcards
Source URL: https://quizplus.com/quiz/58300
Sample Questions
Q1) A decrease in the basis will __________ a long hedger and __________ a short hedger.
A)hurt; benefit
B)hurt; hurt
C)benefit; hurt
D)benefit; benefit
E)benefit; have no effect upon
Q2) Agricultural futures contracts are actively traded on A)soybeans.
B)oats.
C)wheat.
D)A and B.
E)all of the above.
Q3) Which one of the following statements regarding "basis" is not true?
A)The basis is the difference between the futures price and the spot price.
B)The basis risk is borne by the hedger.
C)A short hedger suffers losses when the basis decreases.
D)The basis increases when the futures price increases by more than the spot price.
E)None of the above.
To view all questions and flashcards with answers, click on the resource link above.
Page 24
Chapter 23: Financial Statement Analysis
Available Study Resources on Quizplus for this Chatper
58 Verified Questions
58 Flashcards
Source URL: https://quizplus.com/quiz/58299
Sample Questions
Q1) Assume the current market futures price is 1.66 A$/$.You borrow 167,000 A$ and convert the proceeds to U.S.dollars and invest them in the U.S at the risk-free rate.You simultaneously enter a contract to purchase 170,340 A$ at the current futures prices (maturity of 1 year).What would be your profit (loss)?
A)Profit of 630 A$
B)Loss of 2300 A$
C)Profit of 2300 A$
D)Loss of 630 A$
E)None of the above
Q2) E-Minis typically have a value of ____________ percent of the standard contract and exist for ____________.
A)50; individual stocks and commodities
B)50; stock indexes and foreign currencies
C)40; stock indexes and commodities
D)20; individual stocks and commodities
E)20; stock indexes and foreign currencies
Q3) Why are commodity futures prices different from other futures prices? Explain the difference and give an example of a commodity and the factors involved.
To view all questions and flashcards with answers, click on the resource link above. Page 25
Chapter 24: Portfolio Performance Evaluation
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/58298
Sample Questions
Q1) Suppose the risk-free return is 6%.The beta of a managed portfolio is 1.5,the alpha is 3%,and the average return is 18%.Based on Jensen's measure of portfolio performance,you would calculate the return on the market portfolio as
A)12%
B)14%
C)15%
D)16%
E)none of the above
Q2) Most professionally managed equity funds generally __________.
A)outperform the S&P 500 index on both raw and risk-adjusted return measures
B)underperform the S&P 500 index on both raw and risk-adjusted return measures
C)outperform the S&P 500 index on raw return measures and underperform the S&P 500 index on risk-adjusted return measures
D)underperform the S&P 500 index on raw return measures and outperform the S&P 500 index on risk-adjusted return measures
E)match the performance of the S&P 500 index on both raw and risk-adjusted return measures
Q3) Discuss,in general,the performance attribution procedures.
To view all questions and flashcards with answers, click on the resource link above. Page 26
Chapter 25: International Diversification
Available Study Resources on Quizplus for this Chatper
52 Verified Questions
52 Flashcards
Source URL: https://quizplus.com/quiz/58297
Sample Questions
Q1) The present exchange rate is C$ = U.S.$0.78.The one year future rate is C$ = U.S.$0.76.The yield on a 1-year U.S.bill is 4%.A yield of __________ on a 1-year Canadian bill will make investor indifferent between investing in the U.S.bill and the Canadian bill.
A)2.4%
B)1.3%
C)6.4%
D)6.7%
E)none of the above
Q2) Discuss some of the factors that might be included in a multifactor model of security returns in an international application of arbitrage pricing theory (APT).
Q3) U.S.investors
A)can trade derivative securities based on prices in foreign security markets.
B)cannot trade foreign derivative securities.
C)can trade options and futures on the Nikkei stock index of 225 stocks traded on the Tokyo stock exchange and on FTSE (Financial Times Share Exchange)indexes of U.K.and European stocks.
D)A and C.
E)none of the above.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 26: Hedge Funds
Available Study Resources on Quizplus for this Chatper
50 Verified Questions
50 Flashcards
Source URL: https://quizplus.com/quiz/58296
Sample Questions
Q1) ________ refers to sorting through huge amounts of historical data to uncover systematic patterns in returns that can be exploited by traders.
A)Data mining
B)Pairs trading
C)Alpha transfer
D)Beta shifting
E)B and C
Q2) Performance evaluation of hedge funds is complicated by ______.
A)liquidity premiums
B)survivorship bias
C)unreliable market valuations of infrequently traded assets
D)unstable risk attributes
E)all of the above
Q3) Hedge funds may invest or engage in
A)distressed firms
B)convertible bonds
C)currency speculation
D)merger arbitrage
E)all of the above
Q4) Explain the five major differences between hedge funds and mutual funds.
To view all questions and flashcards with answers, click on the resource link above. Page 28
Chapter 27: The Theory of Active Portfolio Management
Available Study Resources on Quizplus for this Chatper
49 Verified Questions
49 Flashcards
Source URL: https://quizplus.com/quiz/58295
Sample Questions
Q1) Benchmark risk
A)is inevitable and is never a significant issue in practice.
B)is inevitable and is always a significant issue in practice.
C)cannot be constrained to keep a Treynor-Black portfolio within reasonable weights.
D)can be constrained to keep a Treynor-Black portfolio within reasonable weights.
E)none of the above.
Q2) One property of a risky portfolio that combines an active portfolio of mispriced securities with a market portfolio is that,when optimized,its squared Sharpe measure increases by the square of the active portfolio's
A)Sharpe ratio.
B)information ratio.
C)alpha.
D)Treynor measure.
E)none of the above.
Q3) Discuss the Treynor-Black model.
To view all questions and flashcards with answers, click on the resource link above.
Chapter 28: Investment Policy and the Framework of the
CFA Institute Appendices
Available Study Resources on Quizplus for this Chatper
83 Verified Questions
83 Flashcards
Source URL: https://quizplus.com/quiz/58294
Sample Questions
Q1) __________ center on the trade-off between the return the investor wants and how much risk the investor is willing to assume.
A)Investment constraints
B)Investment objectives
C)Investment policies
D)All of the above
E)None of the above
Q2) __________ in the process of asset allocation.
A)Deriving the efficient portfolio frontier is a step
B)Specifying asset classes to be included in the portfolio is a step
C)Specifying the capital market expectations is a step
D)All of the above are steps
E)None of the above is a step in the asset allocation process.
Q3) For an individual investor,the value of home ownership is likely to be viewed
A)as a hedge against increases in rental rates.
B)as a guarantee of availability of a particular residence.
C)as a hedge against inflation.
D)both A and B.
E)all of the above.
Q4) Discuss investments as a hedge against inflation
To view all questions and flashcards with answers, click on the resource link above. Page 30