1) The shares of a mutual often sell for discount from net asset value.
2) A conservative investor will prefer a bond with a smaller duration even though it may
have a longer term to maturity.
3) If interest rates decline after a bond is issued and the investor reinvests the interest
payment, the realized yield exceeds the yield to maturity.
4) According to the Ibbotson Associates studies of investment returns, larger stocks in
the S&P earned higher returns than the smaller companies.
5) If a firm retains earnings, total equity increases.
6) As interest rates increase, the prices of existing bonds increase.
7) Realized returns include both dividends and price changes.
8) Investments are made in anticipation of a return.
9) A swap agreement may be used by a financial manager to reduce risk exposure.
10) The passage of Sarbanes-Oxley created a stronger firewall between investment
banking activities and the role of financial analysts.
11) An investor may reduce risk by simultaneously purchasing a stock and a put option.