Index funds tend to have lower expenses than other funds because they don ‘t incur the
costs of professional portfolio management.
Which of the following is NOT true regarding bond maturities?
a. Short maturities sacrifice price appreciation opportunities.
b. Longer maturities have greater price fluctuations.
c. Short maturities serve to protect the investor when rates are rising.
d. Long term interest rates are more volatile than short term interest rates.
Which of the following statements regarding portfolio risk and number of stocks is
generally true?
Adding more stocks increases riskAdding more stocks decreases risk but does not
eliminate itAdding more stocks has no effect on riskAdding more stocks increases only
systematic risk
The cumulative number of futures contracts that are not offset at any point in time is
called:
a. margin.
b. open interest.
c. hedged position.
d. marked to the market position.
Sidecars, trading halts and Rule 80A are all types of circuit breakers employed by the
NYSE.
A company may maintain its ROA if the net income margin decreases by increasing its
asset turnover.
Yield spreads vary inversely with the: ______________________________.
Some securities are considered to be ‘defensive’ in that they tend to hold their value or
increase in value when the majority of securities are losing value, such as during a
recession. What could one conclude about the betas of defensive securities?