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Question 1 of 10
1. Question
Which of the following bids does an institutional investor do?
Correct
A strike bid is a currency type that states the amount of money the investor is willing to give.
Incorrect
A strike bid is a currency type that states the amount of money the investor is willing to give.
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Question 2 of 10
2. Question
Which of the following bids does an institutional investor do?
Correct
The only difference between a limit bid to a striking bid is that limit bids are revised twice.
Incorrect
The only difference between a limit bid to a striking bid is that limit bids are revised twice.
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Question 3 of 10
3. Question
Which of the following bids does an institutional investor do?
Correct
A step bid is where an investor presents their bid depending on the stock that they will get. Normally there are multiple bids for a different number of stocks.
Incorrect
A step bid is where an investor presents their bid depending on the stock that they will get. Normally there are multiple bids for a different number of stocks.
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Question 4 of 10
4. Question
Which of the following is true for the constant relative risk aversion form?
Correct
The constant relative risk aversion equation is the most commonly used function to determine the utility function in policies.
Incorrect
The constant relative risk aversion equation is the most commonly used function to determine the utility function in policies.
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Question 5 of 10
5. Question
Which of the following is true for RRA?
Correct
Based on risk relative aversion, a larger value of γ will produce a higher measurement of curvature in the utility function.
Incorrect
Based on risk relative aversion, a larger value of γ will produce a higher measurement of curvature in the utility function.
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Question 6 of 10
6. Question
In RRA, which of the following defines the LHS?
Correct
RRA function is used to avoid the risk of losing an X amount of cash.
Incorrect
RRA function is used to avoid the risk of losing an X amount of cash.
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Question 7 of 10
7. Question
In RRA, which of the following defines the RHS?
Correct
The average of U(ω) and U(ω-L) will obtain the expected utility in the RRA.
Incorrect
The average of U(ω) and U(ω-L) will obtain the expected utility in the RRA.
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Question 8 of 10
8. Question
Calculate the RHS of an RRA function. Given ω=200000, L=10000, p=0.01, and γ=0.5.
Correct
The first term in the RHS is the utility of wealth after loss while the second term is the utility of wealth when there is no loss.Incorrect
The first term in the RHS is the utility of wealth after loss while the second term is the utility of wealth when there is no loss. -
Question 9 of 10
9. Question
What is the key variable for an IPO?
Correct
In an IPO, the purpose of a roadshow is to gain knowledge of the potential investors for the company.
Incorrect
In an IPO, the purpose of a roadshow is to gain knowledge of the potential investors for the company.
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Question 10 of 10
10. Question
Calculate the RHS of an RRA function. Given ω=300000, L=15000, p=0.01, and γ=0.6.