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1) which of the following is not a type of bond swap used in active portfolio
management?
a.intermarket spread swap
b.substitution swap
c.rate anticipation swap
d.asset-liability swap
2) research indicates that exchange risk of the major currencies has been _________ so
far in this century.
a.relatively high
b.relatively low
c.declining slightly
d.declining rapidly
3) an individual who goes short in a futures position _____.
a.commits to delivering the underlying commodity at contract maturity
b.commits to purchasing the underlying commodity at contract maturity
c.has the right to deliver the underlying commodity at contract maturity
d.has the right to purchase the underlying commodity at contract maturity
4) pension fund managers can generally best bring about an effective reduction in their
interest rate risk by holding ___________________.
a.long-maturity bonds
b.long-duration bonds
c.short-maturity bonds
d.short-duration bonds
5) you purchased xyz stock at $50 per share. the stock is currently selling at $65. your
gains could be protected by placing a _________.
a.limit buy order
b.limit sell order
c.market order
d.stop-loss order
6) the business cycle depicts:
a.fluctuations in the general price level.
b.the phases a business goes through from when it first opens to when it finally closes.
c.the evolution of technology over time.
d.short-run fluctuations in output and employment.
7) hedge funds are typically set up as _______________.
a.limited liability partnerships
b.corporations
c.reits
d.mutual funds
8) the stone harbor fund is a closed-end investment company with a portfolio currently
worth $300 million. it has liabilities of $5 million and 9 million shares outstanding. if
the fund sells for $30 a share, what is its premium or discount as a percent of nav?
a.9.26% premium
b.8.47% premium
c.9.26% discount
d.8.47% discount
9) a level _____ subscriber to the nasdaq system may enter bid and ask prices.
a.1
b.2
c.3
d.4
10) the part of a stock's return that is systematic is a function of which of the following
variables?
i. volatility in excess returns of the stock market
ii. the sensitivity of the stock's returns to changes in the stock market
iii. the variance in the stock's returns that is unrelated to the overall stock market
a.i only
b.i and ii only
c.ii and iii only
d.i, ii, and iii
11) in what industry are investors likely to use the dividend discount model and arrive
at a price close to the observed market price?
a.import/export trade
b.software
c.telecommunications
d.utility
12) at contract maturity the basis should equal ___________.
a.1
b.0
c.the risk-free interest rate
d.-1
13) a firm has an roe of 20% and a market-to-book ratio of 2.38. its p/e ratio is
_________.
a.8.4
b.11.9
c.17.62
d.47.6
14) modern economic growth refers to countries that have experienced an increase in:
a.real gdp over time.
b.nominal gdp over time.
c.real output spread evenly across all sectors of the economy.
d.real output per person.
