1) which of the following firms was not engaged in a major accounting scandal between
2000 and 2005?
a.general electric
b.parmalat
c.enron
d.worldcom
2) the dollar-weighted return is the _________.
a.difference between cash inflows and cash outflows
b.arithmetic average return
c.geometric average return
d.internal rate of return
3) which one of the following statements about 401k plans is not correct?
a.the employer will typically match some portion of an employee’s contributions to a
401k.
b.a 401k plan is a defined contribution plan.
c.allowable contributions to 401k plans are limited.
4) __________ portfolio construction starts with selecting attractively priced securities.
a.bottom-up
b.top-down
c.upside-down
d.side-to-side
5) _______ have become the main way for investors to speculate in precious metals.
a.strategic income funds
b.balanced funds
c.specialized-sector funds
d.exchange-traded funds
6) arbitrage is based on the idea that _________.
a.assets with identical risks must have the same expected rate of return
b.securities with similar risk should sell at different prices
c.the expected returns from equally risky assets are different
d.markets are perfectly efficient
7) the __________ calculates the reward to risk trade-off by dividing the average
portfolio excess return by the portfolio beta.
a.sharpe ratio
b.treynor measure
c.jensen measure
d.appraisal ratio
8) the table below shows some data for key biscuit company:
what must have caused the firm’s roe to drop?
a.the firm began using more debt as a percentage of financing.
b.the firm began using less debt as a percentage of financing.
c.the compound leverage ratio was less than 1.
d.the operating roa was declining.
9) an investor in a 28% tax bracket is trying to decide whether to invest in a municipal
bond or a corporate bond. she looks up municipal bond yields (rm) but wishes to
calculate the taxable equivalent yield r. the formula she should use is given by ______.
a.r = rm (1 – 28%)
b.r = rm/(1 – 72%)
c.r = rm (1 – 72%)
d.r = rm/(1 – 28%)
10) employers commonly match at least some portion of employee contributions to:
i. 401k plans
ii.403b plans
iii. self-directed retirement plans
a.i only
b.i and ii only
c.ii only
d.i, ii, and iii