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Question
Both a wife and her husband work in the airline industry. They are in their 40s, and they have a high tax bracket and are concerned about their after-tax rate of return. A meeting with their financial planner reveals that they are primarily focused on long-term capital gains and will need at least a 9% to 11% average rate of return to meet their retirement goals. They desire a diversified portfolio, and liquidity is not currently a major concern. Which of the following asset allocations seems to best fit their situation?
A) 10% money market; 40% long-term bonds; 10% commodities; 40% high-dividend-paying stocks
B) 0% money market; 60% long-term bonds; 40% stocks
C) 10% money market; 30% long-term bonds; 10% commodities; 50% high-dividend-paying stocks
D) 5% money market; 30% long-term bonds; 5% commodities; 60% stocks, most with low dividends and high growth prospects
Answer
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Related questions
Q:
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B) -20%
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Q:
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Q:
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Q:
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Q:
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Day
1 2 3 4 Advances
870 760 960 840 Declines
880 990 790 910 Volume advancing(m)
580 620 480 510 Volume declining(m)
670 580 720 520 Yield on top-rated corporate bonds
6.8
%
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%
6.7
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Q:
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97,406.25 Tuesday
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Q:
Assuming semiannual compounding, a 20-year zero coupon bond with a par value of $1,000 and a required return of 12% would be priced at ________.
A) $97.22
B) $104.49
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D) $732.14
Q:
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Q:
If the simple CAPM is valid and all portfolios are priced correctly, which of the situations below is possible? Consider each situation independently, and assume the risk-free rate is 5%.
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1.0 B) Portfolio
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20 C) Portfolio
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Q:
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Q:
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Q:
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Q:
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B) 99:6/10
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Q:
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Q:
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Q:
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Q:
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A) 7.24%
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C) 9.12%
D) 9.62%
Q:
Which of the following is not one of the main areas covered in the examinations that must be taken in order to achieve the designation of Chartered Financial Analyst?
A) investment management ethics
B) securities analysis
C) securities marketing techniques
D) portfolio management
Q:
To become a CFA, you must do all of the following except which one?
A) Pass three exams designed to ensure that you have sufficient knowledge of investments.
B) Obtain 3 years of work experience in money management.
C) Become a member of a local Society of the Financial Analysts Federation.
D) Divest all your own stock holdings to eliminate any potential conflicts of interest with client recommendations.
Q:
A ________ insurance policy provides death benefits, with no buildup of cash value.
A) whole-life
B) universal life
C) variable life
D) term life
Q:
In a defined contribution pension plan, the ________ bears all of the fund's investment performance risk.
A) employer
B) employee
C) fund manager
D) government
Q:
When life insurance companies seek long term investments, they are focusing on________.
A) maximizing returns
B) smoothing out long-term returns
C) tax considerations
D) the investment horizon
Q:
One of the major functions of the investment committee is to ________.
A) determine security selection of each portfolio operated by the investment company
B) translate the objectives and constraints of the investment company into an asset universe
C) determine the percentages of each security in the total investment company portfolio
D) calculate and report the overall rate of return to investment company constituents