Exam 1
Exam 1
1.) The ability to sell an asset quickly at a fair price is associated with:
B. Liquidity Risk
2.) Sources of risk for an investment include:
C. Business risk and financial risk
3.) The real risk-free rate is affected by a two factors:
E. Time preference for income for consumption and the set of opportunities available in the economy.
4.) Two factors that influence the nominal risk-free rate are:
A. The relative ease or tightness in capital markets and the expected rate of inflation
5.)The total risk for a security can be measured by its:
C. Standard Deviation or returns
6.) Which of the following is an underwriting function?
B. Risk-bearing
7.) An ETF (exchange fund):
C. Is priced continuously during the trading day
8.) Which of the following are reasons that U.S. investors should consider foreign markets when constructing global portfolios?
D. All of the above
9.)The original maturity of a United States Treasury and is:
C. One year or less
10.) Certificates of ownership issued by a U.S. bank that represent indirect ownership of a certain number of shares of a specific foreign firm on deposit in a bank in the firm’s home country are known as:
A. American Depository Receipts (ADRs)
11.) _________ must be stated in terms of expected returns and risk. An investor’s tolerance for risk must be established before returns objectives can be stated.
D. Investment objectives
12.) The first step in the investment process is the development of a(an):
B. Policy Statement
13.) _________ phase is the stage when investors in their early to middle earning years attempt to accumulate assets to satisfy near term needs. (ie. Children’s education or down payment. A. Accumulation
14.) __________ is an appropriate objective for investors who want their portfolio to grow in real terms (ie. Exceeds the rate of inflation).
B. Capital Appreciation
15.) Asset allocation is:
A. The process of dividing funds into asset classes
16.) Once the portfolio is constructed, it must be
1.) The ability to sell an asset quickly at a fair price is associated with:
B. Liquidity Risk
2.) Sources of risk for an investment include:
C. Business risk and financial risk
3.) The real risk-free rate is affected by a two factors:
E. Time preference for income for consumption and the set of opportunities available in the economy.
4.) Two factors that influence the nominal risk-free rate are:
A. The relative ease or tightness in capital markets and the expected rate of inflation
5.)The total risk for a security can be measured by its:
C. Standard Deviation or returns
6.) Which of the following is an underwriting function?
B. Risk-bearing
7.) An ETF (exchange fund):
C. Is priced continuously during the trading day
8.) Which of the following are reasons that U.S. investors should consider foreign markets when constructing global portfolios?
D. All of the above
9.)The original maturity of a United States Treasury and is:
C. One year or less
10.) Certificates of ownership issued by a U.S. bank that represent indirect ownership of a certain number of shares of a specific foreign firm on deposit in a bank in the firm’s home country are known as:
A. American Depository Receipts (ADRs)
11.) _________ must be stated in terms of expected returns and risk. An investor’s tolerance for risk must be established before returns objectives can be stated.
D. Investment objectives
12.) The first step in the investment process is the development of a(an):
B. Policy Statement
13.) _________ phase is the stage when investors in their early to middle earning years attempt to accumulate assets to satisfy near term needs. (ie. Children’s education or down payment. A. Accumulation
14.) __________ is an appropriate objective for investors who want their portfolio to grow in real terms (ie. Exceeds the rate of inflation).
B. Capital Appreciation
15.) Asset allocation is:
A. The process of dividing funds into asset classes
16.) Once the portfolio is constructed, it must be