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1) ______________________ are often called mutual funds.
a.unit investment trusts
b.open-end investment companies
c.closed-end investment companies
d.reits
2) which of the following typically strives to earn a return on their investments that
exceeds the actuarially determined rate of return?
a.banks
b.thrifts
c.mutual funds
d.pension funds
3) assume that you have invested $500,000 to purchase shares in a hedge fund reporting
$800 million in assets, $100 million in liabilities, and 70 million shares outstanding.
your initial lockout period is 3 years.
if the share price after 3 years increases to $15.28, what is the value of your
investment?
a.$553,600
b.$625,000
c.$733,800
d.$764,000
4) which one of the following statements is correct?
a.invoice price = flat price - accrued interest
b.invoice price = flat price + accrued interest
c.flat price = invoice price + accrued interest
d.invoice price = settlement price - accrued interest
5) on monday morning you sell one june t-bond futures contract at 97:27, that is, for
$97,843.75. the contract's face value is $100,000. the initial margin requirement is
$2,700, and the maintenance margin requirement is $2,000 per contract. use the
following price data to answer the following questions.
the cumulative rate of return on your investment after wednesday is a ____.
a.79.9% loss
b.2.6% loss
c.33% gain
d.53.9% loss
6)
what is the beta for a portfolio with an expected return of 12.5%?
a.0
b.1
c.1.5
d.2
7) which of the following is not a nickname for an agency associated with the mortgage
markets?
a.fannie mae
b.freddie mac
c.sallie mae
d.ginnie mae
8) recent analysis indicates that the style of investing is a critical component of fund
performance. in fact, on average about _____ of fund performance is attributable to the
asset allocation decision.
a.68%
b.74%
c.88%
d.97%
9) in a __________ underwriting arrangement, the underwriter assumes the full risk that
shares may not be sold to the public at the stipulated offering price.
a.best-efforts
b.firm-commitment
c.private placement
d.none of these options
10) the tendency when the ______ performing stocks in one period are the best
performers in the next and the current ________ performers are lagging the market later
is called the reversal effect.
a.worst; best
b.worst; worst
c.best; worst
d.best; best
11) if a firm's ratio of stockholders' equity/total assets is lower than the industry average
and its ratio of long-term debt/stockholders' equity is also lower than the industry
average, this would suggest that the firm _________.
a.has more current liabilities than the industry average
b.has more leased assets than the industry average
c.will be less profitable than the industry average
d.has more current assets than the industry average
12) the holding period return on a stock is equal to _________.
a.the capital gain yield over the period plus the inflation rate
b.the capital gain yield over the period plus the dividend yield
c.the current yield plus the dividend yield
d.the dividend yield plus the risk premium
13) if the utility you derive from your next dollar of wealth increases by less than a loss
of a dollar reduces it, you are exhibiting __________.
a.loss aversion
b.regret avoidance
c.mental accounting
d.framing bias
14) $1,000 par value zero-coupon bonds (ignore liquidity premiums)
the expected 2-year interest rate 3 years from now should be _________.
a.9.55%
b.11.74%
c.14.89%
d.13.73%
