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Question 1 of 10
1. Question
Which of the following is critical for investment advisors and consultants to know and understand?
I. the cash flow of investor capital
II. the sales profit margin
III. inflation
IV. the history of global financial marketsCorrect
It is critical for investment advisors and consultants to know and understand the history of global financial markets.
Incorrect
It is critical for investment advisors and consultants to know and understand the history of global financial markets.
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Question 2 of 10
2. Question
Investors have a variety of assets in which they can invest such as?
I. private equity
II. mortgages
III. real estate
IV. civil firmsCorrect
Investors have a variety of assets in which they can invest, from private equity to mortgages to real estate.
Incorrect
Investors have a variety of assets in which they can invest, from private equity to mortgages to real estate.
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Question 3 of 10
3. Question
The SBBI data set consists of which of the following assets?
I. medium-term U.S. government bonds
II. U.S. corporate bonds
III. small company U.S. stocks
IV. U.S. Treasury billsCorrect
The SBBI data set consists of six assets, large company and small company U.S. stocks, long-term and medium-term U.S. government bonds, U.S. corporate bonds, and U.S. Treasury bills.
Incorrect
The SBBI data set consists of six assets, large company and small company U.S. stocks, long-term and medium-term U.S. government bonds, U.S. corporate bonds, and U.S. Treasury bills.
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Question 4 of 10
4. Question
Wise investors don’t spend too much time agonizing over the source of the premium but instead do which of the following?
I. They simply take advantage of it by reinvesting on equity stocks
II. They simply diversify their investments through stocks and bonds.
III. They find other means of investing other equities.
IV. They simply take advantage of it by focusing on equities in their portfolios.Correct
Wise investors don’t spend too much time agonizing over the source of the premium. They simply take advantage of it by focusing on equities in their portfolios.
Incorrect
Wise investors don’t spend too much time agonizing over the source of the premium. They simply take advantage of it by focusing on equities in their portfolios.
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Question 5 of 10
5. Question
Which of the following ratio for stocks is more than twice the size of the ratio for bonds?
I. The Sharpe ratio
II. The Equity ratio
III. The premium ratio
IV. The stock ratioCorrect
The Sharpe ratio for stocks is more than twice the size of the ratio for bonds.
Incorrect
The Sharpe ratio for stocks is more than twice the size of the ratio for bonds.
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Question 6 of 10
6. Question
For a long-run investor, which of the following can substantially reduce the real gain on a portfolio?
I. Investor capital
II. Tax
III. Inflation
IV. Market priceCorrect
For a long-run investor, however, inflation can substantially reduce the real gain on a portfolio.
Incorrect
For a long-run investor, however, inflation can substantially reduce the real gain on a portfolio.
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Question 7 of 10
7. Question
Which of the following diagram was often used in the marketing materials of foreign stock mutual fund managers during the mid-1990s?
I. The horseshoe diagram
II. The candlestick diagram
III. The bull/bear diagram
IV. The hammer diagramCorrect
The horseshoe diagram was often used in the marketing materials of foreign stock mutual fund managers during the mid-1990s.
Incorrect
The horseshoe diagram was often used in the marketing materials of foreign stock mutual fund managers during the mid-1990s.
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Question 8 of 10
8. Question
Diversified portfolios still lowered risk, but portfolios with high proportions of foreign stocks had lower returns than which of the following portfolios?
I. Asian-only portfolios
II. U.S.-only portfolios
III. UK-only portfolios
IV. U.S. and UK portfoliosCorrect
Diversified portfolios still lowered risk, but portfolios with high proportions of foreign stocks had lower returns than U.S.-only portfolios.
Incorrect
Diversified portfolios still lowered risk, but portfolios with high proportions of foreign stocks had lower returns than U.S.-only portfolios.
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Question 9 of 10
9. Question
There is an all-American portfolio consisting of 75 percent invested in the S&P 500 and 25 percent in the medium-term Treasury bond. The diversified portfolio replaces how much of the stock allocation(s), and how many percent of the whole portfolio, with foreign stocks?
I. one third / 35%
II. half / 50%
III. one fourth / 20%
IV. one third / 25%Correct
There is an all-American portfolio consisting of 75 percent invested in the S&P 500 and 25 percent in the medium-term Treasury bond. The diversified portfolio replaces one third of the stock allocation, 25 percent of the whole portfolio, with foreign stocks.
Incorrect
There is an all-American portfolio consisting of 75 percent invested in the S&P 500 and 25 percent in the medium-term Treasury bond. The diversified portfolio replaces one third of the stock allocation, 25 percent of the whole portfolio, with foreign stocks.
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Question 10 of 10
10. Question
The portfolio containing which of the following has a higher return and lower standard deviation?
I. EAFE
II. NASDAQ
III. S&P
IV. FT100Correct
The portfolio containing EAFE has a higher return and lower standard deviation. So the Sharpe ratio is also higher at 0.41 as opposed to 0.37 for the all-American portfolio.
Incorrect
The portfolio containing EAFE has a higher return and lower standard deviation. So the Sharpe ratio is also higher at 0.41 as opposed to 0.37 for the all-American portfolio.