Q&A Hero

Q: The current stock price of Howard & Howard is $64, and the stock does not pay dividends. The instantaneous risk-free rate of return is 5%. The instantaneous standard deviation of H&H's stock is 20%. You want to purchase a call option on this stock with an exercise price of $55 and an expiration date 73 days from now. Using the Black-Scholes OPM, the call option should be worth ________ today. A) $0.01 B) $0.08 C) $9.26 D) $9.62

Q: The current stock price of National Paper is $69, and the stock does not pay dividends. The instantaneous risk-free rate of return is 10%. The instantaneous standard deviation of National Paper's stock is 25%. You want to purchase a put option on this stock with an exercise price of $70 and an expiration date 73 days from now. Using the Black-Scholes, the put option should be worth ________ today. A) $1.50 B) $2.88 C) $2.55 D) $3.00

Q: The current stock price of National Paper is $69, and the stock does not pay dividends. The instantaneous risk-free rate of return is 10%. The instantaneous standard deviation of National Paper's stock is 25%. You want to purchase a call option on this stock with an exercise price of $70 and an expiration date 73 days from now. Using the Black-Scholes OPM, the call option should be worth ________ today. A) $2.50 B) $2.94 C) $3.26 D) $3.50

Q: The current stock price of Alcoco is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a put option on this stock with an exercise price of $75 and an expiration date 30 days from now. According to the Black-Scholes OPM, you should hold ________ shares of stock per 100 put options to hedge your risk. A) 30 B) 34 C) 69 D) 74

Q: The current stock price of Alcoco is $70, and the stock does not pay dividends. The instantaneous risk-free rate of return is 6%. The instantaneous standard deviation of Alcoco's stock is 40%. You want to purchase a call option on this stock with an exercise price of $75 and an expiration date 30 days from now. Based on the Black-Scholes OPM, the call option's delta will be ________. A) 0.28 B) 0.31 C) 0.62 D) 0.70

Q: The financial statements of Flathead Lake Manufacturing Company are shown below. Income Statement 2017 Sales $ 9,300,000 Cost of Goods Sold 5,750,000 Depreciation Expense 550,000 Gross Profit $ 3,000,000 Selling and Administrative Expenses 2,200,000 EBIT $ 800,000 Interest Expense 200,000 Income before Tax $ 600,000 Taxes 375,000 Net Income $ 225,000 Flathead Lake Manufacturing Comparative Balance Sheets 2017 2016 Cash $ 50,000 $ 40,000 Accounts Receivable 570,000 600,000 Inventory 530,000 460,000 Total Current Assets $ 1,150,000 $ 1,100,000 Fixed Assets 2,050,000 1,400,000 Total Assets $ 3,200,000 $ 2,500,000 Accounts Payable $ 320,000 $ 300,000 Bank Loans 480,000 400,000 Total Current Liabilities $ 800,000 $ 700,000 Long-term Bonds 1,500,000 1,000,000 Total Liabilities $ 2,300,000 $ 1,700,000 Common Stock (200,000 shares) 200,000 200,000 Retainded Earnings 700,000 600,000 Total Equity $ 900,000 $ 800,000 Total Liabilities and Equity $ 3,200,000 $ 2,500,000 Note: The common shares are trading in the stock market for $15 per share. Refer to the financial statements of Flathead Lake Manufacturing Company. The firm's compound leverage ratio is ________. (Please keep in mind that when a ratio involves both income statement and balance sheet numbers, the balance sheet numbers for the beginning and end of the year must be averaged.) A) 1.5 B) 2 C) 2.5 D) 3

Q: The financial statements of Flathead Lake Manufacturing Company are shown below. Income Statement 2017 Sales $ 9,300,000 Cost of Goods Sold 5,750,000 Depreciation Expense 550,000 Gross Profit $ 3,000,000 Selling and Administrative Expenses 2,200,000 EBIT $ 800,000 Interest Expense 200,000 Income before Tax $ 600,000 Taxes 375,000 Net Income $ 225,000 Flathead Lake Manufacturing Comparative Balance Sheets 2017 2016 Cash $ 50,000 $ 40,000 Accounts Receivable 570,000 600,000 Inventory 530,000 460,000 Total Current Assets $ 1,150,000 $ 1,100,000 Fixed Assets 2,050,000 1,400,000 Total Assets $ 3,200,000 $ 2,500,000 Accounts Payable $ 320,000 $ 300,000 Bank Loans 480,000 400,000 Total Current Liabilities $ 800,000 $ 700,000 Long-term Bonds 1,500,000 1,000,000 Total Liabilities $ 2,300,000 $ 1,700,000 Common Stock (200,000 shares) 200,000 200,000 Retainded Earnings 700,000 600,000 Total Equity $ 900,000 $ 800,000 Total Liabilities and Equity $ 3,200,000 $ 2,500,000 Note: The common shares are trading in the stock market for $15 per share. Refer to the financial statements of Flathead Lake Manufacturing Company. The firm's inventory turnover ratio is ________. (Please keep in mind that when a ratio involves both income statement and balance sheet numbers, the balance sheet numbers for the beginning and end of the year must be averaged.) A) 11.6 B) 10.2 C) 9.5 D) 7.7

Q: ART has come out with a new and improved product. As a result, the firm projects an ROE of 25%, and it will maintain a plowback ratio of 0.20. Its earnings this year will be $3 per share. Investors expect a 12% rate of return on the stock. What price do you expect ART shares to sell for in 4 years? A) $53.96 B) $44.95 C) $41.68 D) $39.76

Q: ART has come out with a new and improved product. As a result, the firm projects an ROE of 25%, and it will maintain a plowback ratio of 0.20. Its earnings this year will be $3 per share. Investors expect a 12% rate of return on the stock. What is the present value of growth opportunities for ART? A) $8.57 B) $9.29 C) $14.29 D) $16.29

Q: Westsyde Tool Company is expected to pay a dividend of $2 in the upcoming year. The risk-free rate of return is 6%, and the expected return on the market portfolio is 12%. Analysts expect the price of Westsyde Tool Company shares to be $29 a year from now. The beta of Westsyde Tool Company's stock is 1.2. Using a one-period valuation model, the intrinsic value of Westsyde Tool Company stock today is ________. A) $24.29 B) $27.39 C) $31.13 D) $34.52

Q: Suppose that in 2018 the expected dividends of the stocks in a broad market index equaled $240 million when the discount rate was 8% and the expected growth rate of the dividends equaled 6%. Using the constant-growth formula for valuation, if interest rates increase to 9%, the value of the market will change by ________. A) -10% B) -20% C) -25% D) -33%

Q: Firm B produces gadgets. The price of gadgets is $2 each. Firm B has total fixed costs of $300,000 and variable costs of $1.40 per gadget. The corporate tax rate is 40%. What is the breakeven number of gadgets B must sell to make a zero after-tax profit? A) 300,000 B) 400,000 C) 500,000 D) 600,000

Q: A 20-year maturity corporate bond has a 6.5% coupon rate (the coupons are paid annually). The bond currently sells for $925.50. A bond market analyst forecasts that in 5 years yields on such bonds will be at 7%. You believe that you will be able to reinvest the coupons earned over the next 5 years at a 6% rate of return. What is your expected annual compound rate of return if you plan on selling the bond in 5 years? A) 7.37% B) 7.56% C) 8.12% D) 8.54%

Q: A 20-year maturity bond pays interest of $90 once per year and has a face value of $1,000. Its yield to maturity is 10%. You expect that interest rates will decline over the upcoming year and that the yield to maturity on this bond will be only 8% a year from now. Using horizon analysis, the return you expect to earn by holding this bond over the upcoming year is ________. A) 10% B) 12% C) 21.6% D) 29.6%

Q: You buy a 10-year $1,000 par value 4% annual-payment coupon bond priced to yield 6%. You do not sell the bond at year-end. If you are in a 15% tax bracket, at year-end you will owe taxes on this investment equal to ________. A) $9.10 B) $4.25 C) $7.68 D) $5.20

Q: You buy a 10-year $1,000 par value zero-coupon bond priced to yield 6%. You do not sell the bond. If you are in a 28% tax bracket, you will owe taxes on this investment after the first year equal to ________. A) $0 B) $4.27 C) $9.38 D) $33.51

Q: The yield to maturity of a 10-year zero-coupon bond with a par value of $1,000 and a market price of $625 is ________. A) 4.8% B) 6.1% C) 7.7% D) 10.4%

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 C) $364.08 D) $732.14

Q: A corporate bond has a 10-year maturity and pays interest semiannually. The quoted coupon rate is 6%, and the bond is priced at par. The bond is callable in 3 years at 110% of par. What is the bond's yield to call? A) 6.72% B) 9.17% C) 4.49% D) 8.98%

Q: You purchased a 5-year annual-interest coupon bond 1 year ago. Its coupon interest rate was 6%, and its par value was $1,000. At the time you purchased the bond, the yield to maturity was 4%. If you sold the bond after receiving the first interest payment and the bond's yield to maturity had changed to 3%, your annual total rate of return on holding the bond for that year would have been approximately ________. A) 5% B) 5.5% C) 7.6% D) 8.9%

Q: A zero-coupon bond has a yield to maturity of 5% and a par value of $1,000. If the bond matures in 16 years, it should sell for a price of ________ today. A) $458.11 B) $641.11 C) $789.11 D) $1,100.11

Q: A coupon bond that pays interest annually has a par value of $1,000, matures in 5 years, and has a yield to maturity of 12%. If the coupon rate is 9%, the intrinsic value of the bond today will be ________. A) $856.04 B) $891.86 C) $926.47 D) $1,000

Q: A coupon bond that pays interest semiannually has a par value of $1,000, matures in 8 years, and has a yield to maturity of 6%. If the coupon rate is 7%, the intrinsic value of the bond today will be ________. A) $1,000 B) $1,062.81 C) $1,081.82 D) $1,100.03

Q: A callable bond pays annual interest of $60, has a par value of $1,000, matures in 20 years but is callable in 10 years at a price of $1,100, and has a value today of $1055.84. The yield to call on this bond is ________. A) 6% B) 6.58% C) 7.2% D) 8%

Q: A coupon bond that pays interest of 4% annually has a par value of $1,000, matures in 5 years, and is selling today at $785. The actual yield to maturity on this bond is ________. A) 7.24% B) 8.82% C) 9.12% D) 9.62%

Q: On day 1, the stock price of Ford was $12 and the automotive stock index was 127. On day 2, the stock price of Ford was $15 and the automotive stock index was 139. Consider the ratio of Ford to the automotive stock index at day 1 and day 2. Ford is ________ the automotive industry, and technical analysts who follow relative strength would advise ________ the stock. A) outperforming; buying B) outperforming; selling C) underperforming; buying D) underperforming; selling

Q: 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 % 6.7 % 6.7 % 6.6 % Yield on intermediate-grade corporate bonds 7.4 % 7.4 % 7.5 % 7.6 % From day 1 to day 4, the TRIN has ________ and is ________. A) increased; bullish B) increased; bearish C) decreased; bullish D) decreased; bearish

Q: At the end of July, the average yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were 7.65% and 8.42%, respectively. At the end of August, the average yields on 10 top-rated corporate bonds and 10 intermediate-grade bonds were 6% and 6.71%, respectively. The confidence index ________ during August, and bond technical analysts are likely to be ________. A) increased; bullish B) increased; bearish C) decreased; bullish D) decreased; bearish

Q: You consider buying a share of stock at a price of $25. The stock is expected to pay a dividend of $1.50 next year, and your advisory service tells you that you can expect to sell the stock in 1 year for $28. The stock's beta is 1.1, rf is 6%, and E[rm] = 16%. What is the stock's abnormal return? A) 1% B) 2% C) -1% D) -2%

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%. A) Portfolio Expected Return Beta A 15% 1.2 Market 15% 1.0 B) Portfolio Expected Return Beta A 20% 12% Market 15% 20 C) Portfolio Expected Return Beta A 20% 1.2 Market 15% 1.0 D) Portfolio Expected Return Beta A 30% 2.5 Market 15% 1.0 A) Option A B) Option B C) Option C D) Option D

Q: Assume that both X and Y are well-diversified portfolios and the risk-free rate is 8%. Portfolio X has an expected return of 14% and a beta of 1. Portfolio Y has an expected return of 9.5% and a beta of .25. In this situation, you would conclude that portfolios X and Y ________. A) are in equilibrium B) offer an arbitrage opportunity C) are both underpriced D) are both fairly priced

Q: You find that the annual Sharpe ratio for stock A returns is equal to 1.8. For a 3-year holding period, the Sharpe ratio would equal ________. A) 1.8 B) 2.48 C) 3.12 D) 5.49

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20%, while the standard deviation on stock B is 15%. The correlation coefficient between the returns on A and B is 0%. The rate of return for stocks A and B is 20% and 10% respectively. The standard deviation of return on the minimum-variance portfolio is ________. A) 0% B) 6% C) 12% D) 17%

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 20%, while the standard deviation on stock B is 15%. The correlation coefficient between the returns on A and B is 0%. The rate of return for stocks A and B is 20% and 10% respectively. The expected return on the minimum-variance portfolio is approximately ________. A) 10% B) 13.6% C) 15% D) 19.41%

Q: An investor can design a risky portfolio based on two stocks, A and B. The standard deviation of return on stock A is 24%, while the standard deviation on stock B is 14%. The correlation coefficient between the returns on A and B is .35. The expected return on stock A is 25%, while on stock B it is 11%. The proportion of the minimum-variance portfolio that would be invested in stock B is approximately ________. A) 45% B) 67% C) 85% D) 92%

Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a standard deviation of return of 20%. The correlation coefficient between the returns of A and B is .4. The risk-free rate of return is 5%. The standard deviation of returns on the optimal risky portfolio is ________. A) 25.5% B) 22.3% C) 21.4% D) 20.7%

Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 21% and a standard deviation of return of 39%. Stock B has an expected return of 14% and a standard deviation of return of 20%. The correlation coefficient between the returns of A and B is .4. The risk-free rate of return is 5%. The expected return on the optimal risky portfolio is approximately ________. (Hint: Find weights first.) A) 14% B) 16% C) 18% D) 19%

Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 18% and a standard deviation of return of 20%. Stock B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is .50. The risk-free rate of return is 10%. The standard deviation of return on the optimal risky portfolio is ________. A) 0% B) 5% C) 7% D) 20%

Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 18% and a standard deviation of return of 20%. Stock B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is .50. The risk-free rate of return is 10%. The expected return on the optimal risky portfolio is ________. A) 14% B) 15.6% C) 16.4% D) 18%

Q: An investor can design a risky portfolio based on two stocks, A and B. Stock A has an expected return of 18% and a standard deviation of return of 20%. Stock B has an expected return of 14% and a standard deviation of return of 5%. The correlation coefficient between the returns of A and B is .50. The risk-free rate of return is 10%. The proportion of the optimal risky portfolio that should be invested in stock A is ________. A) 0% B) 40% C) 60% D) 100%

Q: You have the following rates of return for a risky portfolio for several recent years. Assume that the stock pays no dividends. Year Beginning of Year Price # of Shares Bought or Sold 2014 $ 50.00 100 bought 2015 $ 55.00 50 bought 2016 $ 51.00 75 sold 2017 $ 54.00 75 sold What is the geometric average return for the period? A) 2.87% B) .74% C) 2.6% D) 2.21%

Q: Two assets have the following expected returns and standard deviations when the risk-free rate is 5%: Asset A E(rA) = 10% σA = 20% Asset B E(rB) = 15% σB = 27% An investor with a risk aversion of A = 3 would find that ________ on a risk-return basis. A) only asset A is acceptable B) only asset B is acceptable C) neither asset A nor asset B is acceptable D) both asset A and asset B are acceptable

Q: Treasury bills are paying a 4% rate of return. A risk-averse investor with a risk aversion of A = 3 should invest entirely in a risky portfolio with a standard deviation of 24% only if the risky portfolio's expected return is at least ________. A) 8.67% B) 9.84% C) 21.28% D) 14.68%

Q: Consider a mutual fund with $300 million in assets at the start of the year and 12 million shares outstanding. If the gross return on assets is 18% and the total expense ratio is 2% of the year-end value, what is the rate of return on the fund? A) 15.64% B) 16% C) 17.25% D) 17.5%

Q: The Hydro Index is a price weighted stock index based on the 5 largest boat manufacturers in the nation. The stock prices for the five stocks are $10, $20, $80, $50 and $40. The price of the last stock was just split 2 for 1 and the stock price was halved from $40 to $20. What is the new divisor for a price weighted index? A) 5.00 B) 4.85 C) 4.50 D) 4.75

Q: If a Treasury note has a bid price of $996.25, the quoted bid price in the Wall Street Journal would be ________. A) 99:5/8 B) 99:6/10 C) 99.6250 D) none of the options

Q: The price of your investment increases 20% one month after you buy it. You do not believe that the stock's prospects have changed. Which one of the following actions would indicate the lowest amount of risk aversion? A) You hang on to the stock, anticipating that it will go higher. B) You buy more stock, anticipating that it will go higher. C) You sell all of your stock holdings immediately. D) You sell half of your stock holdings and invest the proceeds in other areas of your portfolio.

Q: The term hedge refers to an investment that is used ________. A) primarily for tax-loss selling purposes B) to mitigate specific financial risks C) to conceal one's true investment strategy from other market participants D) primarily to defer capital losses

Q: The two most important factors in describing an individual's or organization's investment objectives are ________. A) income level and age B) income level and risk tolerance C) age and risk tolerance D) return requirement and risk tolerance

Q: As the typical investor ages, the composition of his wealth usually switches from primarily ________ to primarily ________. A) human capital; financial capital B) financial capital; human capital C) intellectual capital; physical capital D) investable capital; noninvestable capital

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: Just 2 months after you put money into an investment, its price falls 25%. Assuming that none of the investment fundamentals have changed, which of the following actions would evidence the greatest risk tolerance? A) You sell to avoid further worry and buy something else. B) You do nothing and wait for the investment to come back. C) You buy more, thinking that if it was a good investment before, now it's not only good but cheap too. D) You sue your financial adviser.

Q: If an investor wants to invest 100% of her portfolio in safe assets but does not want to manage her portfolio, she should invest in ________. A) a money market fund B) a growth stock fund C) several different money market instruments D) several different stocks

Q: At the early stage of an individual's working career, his or her retirement portfolio should probably consist mostly of ________. A) annuities B) stocks C) bonds D) commodities

Q: The major asset most people have during their early working years is their ________. A) home B) stock portfolio C) earning power derived from their skills D) bond portfolio

Q: A portfolio manager indexes part of a portfolio and actively manages the rest of the portfolio. This is called a ________ strategy. A) passive-aggressive B) passive core C) passively active D) balanced fund

Q: Price volatility is greatest on which one of the following investments? A) commercial paper B) 20-year zero-coupon bonds C) Treasury notes D) Treasury bills

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: SoHo International Investment Management has an asset allocation strategy of 57% U.S. investments and 43% global investments. Within the United States, Go Global has allocated 55% of its portfolio to equities and 45% to bonds. SoHo International now holds 4.4% of its U.S. equity portfolio in the stock of Bright Force. Internationally, SoHo International has allocated 72% to equities and 28% to bonds. About what percentage of SoHo International's total portfolio is invested in Bright Force? A) 1% B) 1.26% C) 1.5% D) 1.81%

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: If the maturity of a bank's assets is much longer than the maturity of its liabilities and it wants to limit its interest rate risk, the bank may ________. A) prefer to invest in long-term bonds in its asset portfolio B) prefer to invest in equities in its asset portfolio C) prefer to invest in variable-rate assets D) decide to increase its fixed-rate mortgage holdings

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: My pension plan will pay me a yearly retirement amount equal to 2% of my highest annual salary for each year of service. I must have ________. A) a defined benefit plan B) a defined contribution plan C) an endowment fund D) a variable annuity

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: In a defined benefit pension plan, the ________ bears all of the fund's investment performance risk. A) employer B) employee C) fund manager D) government

Q: To ________ means to mitigate a financial risk. A) invest B) speculate C) hedge D) renege

Q: Which type of insurance product gives policyholders a fixed death benefit and a selection of investment alternatives? A) term B) variable life C) universal life D) whole life

Q: Which type of insurance product allows policyholders to adjust their death benefit according to their needs? A) term B) variable life C) universal life D) whole life

Q: Which of the following is typically concerned with their investment assets having relatively fixed returns and their liabilities having relative variable returns? A) banks B) insurance companies C) mutual funds D) pension funds

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: A pension fund manager who decided to move money out of an index fund and into a socially responsible fund is ________. A) violating the prudent investor rule B) conducting best practices of investing C) conforming to CFA ethics requirements D) planning for the future

Q: One way that life insurance firms can hedge the risk created by offering whole-life insurance policies is by ________. A) holding long-term bonds B) holding equities C) holding short-term bonds D) exercising its right to terminate the policy

Q: A portfolio consists of three index funds: an equity index accounting for 40% of the total portfolio, a bond index accounting for 30% of the total portfolio, and an international index accounting for 30% of the total portfolio. After each quarter the portfolio manager buys and sells some of each sector to preserve the original weights for each sector. This is an example of ________. A) a passively managed core with an actively managed component B) a totally passively managed fund C) passive asset allocation with active security selection D) active asset allocation with passive security selection

Q: A portfolio consists of three index funds: an equity index, a bond index, and an international index. The portfolio manager changes the weights periodically according to forecasts for each sector. This is an example of ________. A) a passively managed core with an actively managed component B) a totally passively managed fund C) passive asset allocation with active security selection D) active asset allocation with passive security selection

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: Go Global Investment Management has an asset allocation strategy of 70% U.S. investments and 30% global investments. Within the United States, Go Global has allocated 65% of its portfolio to equities and 35% to bonds. Go Global now holds 4% of its U.S. equity portfolio in the stock of Wally World. Internationally, Go Global has allocated 62% to equities and 38% to bonds. About what percentage of Go Global's total portfolio is invested in Wally World? A) 1% B) 1.26% C) 1.5% D) 1.82%

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: For an investor concerned with maximizing liquidity, which of the following investments should be avoided? A) real estate B) bonds C) domestic stocks D) international stocks