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Question
The largest nongovernmental regulator of securities firms in the United States is ________.
A. the CFA Institute
B. the Public Company Accounting Oversight Board
C. the Financial Industry Regulatory Authority
D. the Board of Directors of NYSE Euronext
Answer
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Related questions
Q:
Which of the following does not approximate the performance of a buy-and-hold portfolio strategy?
A. An equally weighted index
B. A price-weighted index
C. A value-weighted index
D. All of these options (Weights are not a factor in this situation.)
Q:
Under a "passive core" portfolio management strategy, a manager would ___________.
A. index the entire portfolio
B. index part of the portfolio and actively manage the rest
C. delegate the management of core segments of the portfolio to other managers
D. actively manage the entire portfolio
Q:
An active asset allocation strategy involves _________.
A. investing in the stock of companies that are price takers
B. maintaining approximately the same proportions of a portfolio in each asset class over time
C. varying the proportions of a portfolio in each asset class in response to changing market conditions
D. selecting individual securities in different sectors that are believed to be undervalued
Q:
An employee has an average wage of $60,000 and has worked for the firm for 25 years. The defined benefit pension plan pays retirees 2.5% of the average wage times the years of service. The employee can expect to receive _______ per year upon retirement.
A. $18,000
B. $37,500
C. $45,325
D. $55,250
Q:
For a bank, the difference between the interest rate charged to borrowers and the interest rate paid on liabilities is called the __________.
A. insurance premium
B. interest rate spread
C. risk premium
D. term premium
Q:
Which one of the following would be considered a "cash equivalent" investment?
A. Treasury bills
B. Common stock
C. Corporate bonds
D. Real estate
Q:
You are thinking of investing in one of two assets. Asset A has higher systematic risk than asset B. You can be sure that asset A's _______ return will be higher than asset B's, but you can't be sure if asset A's _______ return will be higher than asset B's.
A. realized; expected
B. real; nominal
C. expected; realized
D. nominal; expected
Q:
Major functions of the investment committee include all but which one of the following?
A. Engage in security selection for each portfolio managed
B. Broadly determine the overall asset allocation of the investment company
C. Determine the asset-class weights for each portfolio
D. Determine the asset universe
Q:
The asset universe is the _____________________.
A. set of investments in which an investment company can legally invest
B. existing set of assets the investment company currently owns in one or more of its portfolios
C. list of assets approved by the investment committee that may be placed into the investment company's portfolio
D. market portfolio of all available risky assets
Q:
An investor is looking at different retirement investment choices, and he is willing to accept one with upside potential even if that means sacrificing certainty. Which of the following will he most likely select?
A. Fixed annuity
B. Defined benefit plan
C. Defined contribution plan
D. Bonds invested in a retirement plan
Q:
Medfield College's $10 million endowment fund is not allowed to spend any contributed capital or any capital gains. The fund may spend only investment earnings. The fund is expected to need between $500,000 and $1,000,000 to pay for new lab equipment for the science building. Which of the following is (are) true?
I. The fund should have a target rate of return of at least 10%.
II. The limitations on spending require that the fund limit its considerations to growth stocks.
III. The requirement to spend money out of the fund this year provides a liquidity constraint that may reduce the fund's rate of return.
A. I only
B. II only
C. I and III only
D. I, II, and III
Q:
An investor with high risk aversion will likely prefer which of the following risk and return combinations?
A. Expected return = 12%, historical standard deviation = 17%
B. Expected return = 14%, historical standard deviation = 19%
C. Expected return = 16%, historical standard deviation = 21%
D. Expected return = 18%, historical standard deviation = 23%
Q:
An investor refuses to invest in any firm that produces alcohol or tobacco. This is an example of a ___________ constraint.
A. return requirement
B. risk-tolerance
C. liquidity
D. social
Q:
A nonprofit organization offers a 5% salary contribution to John's 403b plan regardless of his own contributions, plus a matching 5% when John contributes 5% of his salary. John makes $56,000 a year.
What is the amount of the total contribution to his 403b if John contributes 5% of his own money?
A. $5,600
B. $8,400
C. $11,200
D. $12,500
Q:
Currently, the maximum combined taxable income of a retired household that avoids having to pay any taxes on a portion of their Social Security benefit is ______.
A. $15,000
B. $32,000
C. $45,000
D. $75,000
Q:
Statistics show that life expectancy at age 66 for males is about _____ additional years and for females is about _____ additional years.
A. 15; 20
B. 16; 19
C. 18; 22
D. 19; 24
Q:
Suppose you have maxed out your allowable contributions to your tax-sheltered retirement plans and you still want to shelter income. The best choice of investment for you to minimize the tax bill is to invest in _________.
A. a bond portfolio
B. stocks with high dividend yields
C. a blended stock and bond portfolio containing zero-coupon bonds
D. stocks with low or zero dividend yields
Q:
Withdrawals after retirement from a traditional retirement plan are __________, and withdrawals after retirement from a Roth retirement plan are ____________.
A. taxable; not taxable
B. not taxable; taxable
C. tax deductible; not tax deductible
D. not tax deductible; tax deductible
Q:
What is the value of a $2,500 deposit into a retirement plan if the investment earns 12% per year for 15 years?
A. $12,174
B. $13,684
C. $14,652
D. $15,523
Q:
The Social Security Primary Insurance Amount formula favors ______.
A. older workers
B. high-income workers
C. younger workers
D. low-income workers
Q:
A retirement plan that offers a tax shelter will defer ______________ taxes on contributions and investment earnings.
A. income
B. sales
C. property
D. estate
Q:
Tilting your retirement savings plan toward your later years should only be done by investors _____________.
A. who are sufficiently risk averse
B. who are more tolerant of risk
C. who are unsure if their income growth will keep up with inflation
D. who want to retire early
Q:
Total annuity income is positively correlated with:
I. Longevity
II. Durability of marriage
III. Expected length of your base (Social Security) annuity
A. I only
B. I and II only
C. II and III only
D. I, II, and III
Q:
Contributions to a _____________ are not tax deductible.
A. traditional retirement plan
B. Roth retirement plan
C. 401k plan
D. 403b plan
Q:
A decrease of 1% in both your tax exemption and your income tax rate would, on net, _______________.
A. make you better off
B. make you worse off
C. make you neither better off nor worse off
D. make you either better or worse off depending on your age
Q:
A typical hedge fund incentive bonus is usually equal to ________ of investment profits beyond a predetermined benchmark index.
A. 5%
B. 10%
C. 20%
D. 25%
Q:
In a 2011 study, Agarwal, Daniel, and Naik documented that hedge funds tend to report average returns in ____________ that are __________ than their average returns in other months.
A. September; lower
B. January; higher
C. January; lower
D. December; higher
Q:
Market-neutral hedge funds may experience considerable volatility. The source of volatile returns is the use of _________.
A. pure play
B. leverage
C. directional bests
D. net short positions
Q:
You manage a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter. Assume the risk-free rate is 2% per quarter and the current value of the S&P 500 Index is 1,200. You want to exploit the positive alpha, but you are afraid that the stock market may fall and you want to hedge your portfolio by selling 3-month S&P 500 future contracts. The S&P contract multiplier is $250.
How much is the portfolio expected to be worth 3 months from now?
A. $15,000,000
B. $15,450,000
C. $15,600,000
D. $16,000,000
Q:
You manage a $15 million hedge fund portfolio with beta = 1.2 and alpha = 2% per quarter. Assume the risk-free rate is 2% per quarter and the current value of the S&P 500 Index is 1,200. You want to exploit the positive alpha, but you are afraid that the stock market may fall and you want to hedge your portfolio by selling 3-month S&P 500 future contracts. The S&P contract multiplier is $250.
When you hedge your stock portfolio with futures contracts, the value of your portfolio beta is __________.
A. 0
B. 1
C. 1.2
D. The answer cannot be determined from the information given.