1) which fidelity magellan portfolio manager is often referenced as an exception to the
general conclusion of efficient markets?
a.jeff vinik
b.peter lynch
c.robert stansky
d.william hayes
2) which of the following is not considered a money market investment?
a.bankers’ acceptance
b.eurodollar
c.repurchase agreement
d.treasury note
3) if the black-scholes formula is solved to find the standard deviation consistent with
the current market call premium, that standard deviation would be called the _______.
a.variability
b.volatility
c.implied volatility
d.deviance
4) at the end of july, the average yields on 10 top-rated corporate bonds and 10
intermediate-grade bonds were 7.65% and 8.42%, respectively. at the end of august, the
average yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were
6% and 6.71%, respectively. the confidence index _________ during august, and bond
technical analysts are likely to be ________.
a.increased; bullish
b.increased; bearish
c.decreased; bullish
d.decreased; bearish
5) stock a has a beta of 1.2, and stock b has a beta of 1. the returns of stock a are
______ sensitive to changes in the market than are the returns of stock b.
a.20% more
b.slightly more
c.20% less
d.slightly less
6) which of the following strategies makes a profit when the stock price declines and
loses money when the stock price increases?
a.long call and short put
b.long call and long put
c.short call and short put
d.short call and long put
7) the largest nongovernmental regulator of securities firms in the united states is
________.
a.the cfa institute
b.the public company accounting oversight board
c.the financial industry regulatory authority
d.the board of directors of nyse euronext
8) your timing was good last year. you invested more in your portfolio right before
prices went up, and you sold right before prices went down. in calculating historical
performance measures, which one of the following will be the largest?
a.dollar-weighted return
b.geometric average return
c.arithmetic average return
d.mean holding-period return
9) the risk-free rate in the united states is 4%, and the risk-free rate in japan is 1.2%. if
the spot rate of yen to dollars is 105, what is the likely yen-per-dollar forward rate?
a.101
b.102
c.105
d.108
10) an adjusted beta will be ______ than the unadjusted beta.
a.lower
b.higher
c.closer to 1
d.closer to 0
11) the price quotations of treasury bonds in the wall street journal show a bid price of
102:12 and an ask price of 102:14. if you sell a treasury bond, you expect to receive
_________.
a.$1,024.75
b.$1,024.38
c.$1,023.75
d.$1,022.50
12) in a recent study, malkiel found that evidence of persistence in the performance of
mutual funds ________________ in the 1980s.
a.grew stronger
b.remained about the same
c.became slightly weaker
d.virtually disappeared
13) you purchase one ibm july 120 call contract for a premium of $5. you hold the
option until the expiration date, when ibm stock sells for $123 per share. you will
realize a ______ on the investment.
a.$200 profit
b.$200 loss
c.$300 profit
d.$300 loss
14)
the moving average generates buy signal(s) _____.
a.on days 3, 11, and 15
b.on days 2 and 16
c.on days 5, 9, and 13
d.on no days
15) moving averages are ______ indicators.
a.sentiment
b.flow of funds
c.trend
d.fundamental
16) the potential loss for a writer of a naked call option on a stock is _________.
a.equal to the call premium
b.larger the lower the stock price
c.limited
d.unlimited
17) the annual inflation rate is ______ risk variable.
a.a firm-specific
b.a political
c.a financial
d.an economic
18) which of the following are assumptions of the simple capm model?
i. individual trades of investors do not affect a stock’s price.
ii. all investors plan for one identical holding period.
iii. all investors analyze securities in the same way and share the same economic view
of the world.
iv. all investors have the same level of risk aversion.
a.i, ii, and iv only
b.i, ii, and iii only
c.ii, iii, and iv only
d.i, ii, iii, and iv
19) according to __________ economists, the growth of the u.s. economy in the 1980s
can be attributed to lower marginal tax rates, which improved the incentives for people
to work.
a.keynesian
b.monetarist
c.supply-side
d.demand-side
20) empirical evidence confirms that investors become __________ as they approach
retirement.
a.greedier
b.less interested in investments
c.more risk averse
d.more risk tolerant