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Quiz von Gelöschter Nutzer, aktualisiert more than 1 year ago
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Frage 1
Frage
Portfolio performance is:
Antworten
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rarely measured in absolute terms, mostly measured in relative terms
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rarely measured in relative terms, mostly measured in absolute terms
-
only ever measured in relative terms
-
only ever measured in absolute terms
Frage 2
Frage
Which of the following is a limitation rather than an assumption of the Capital Asset Pricing
Model?
Antworten
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Investors are rational and risk averse
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Investors hold a well-diversified portfolio
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Investors make investment decisions based on mean variance analysis
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Investors are rewarded for more than just their exposure to systemic risk
Frage 3
Frage
An investor allowed the principle of 'regret aversion' to influence his actions. This resulted in
him:
Antworten
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declining to buy a stock based purely on a previous bad experience
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B buying a badly performing stock from a friend as recompense for recommending it in the first place
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holding a poorly performing stock for an irrationally long period
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only selling stock once a specified loss threshold had been reached
Frage 4
Frage
Why is a time weighted return (TWR) preferred to a money weighted return (MWR) when
evaluating performance?
Antworten
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TWR only requires portfolio values at the start and end of the investment period along with dates and size of each cash flow
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TWR eliminates the timing effect of cash flows into and out of the fund
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TWR measures the fund growth resulting from both the underlying performance of the portfolio and the size and timing of cash flows into and out of the fund
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TWR calculates the risk adjusted return per unit of risk
Frage 5
Frage
Four bond portfolios each hold a variety of stock. Which one of them is BEST described as
operating a barbell strategy?
Antworten
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Portfolio A, which consists solely of bills maturing in one year plus bonds maturing in 25 and 30 years
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Portfolio B, which consists solely of bills maturing in six months plus bonds maturing in 5, 10, 15 and 20 years
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Portfolio C, which consists solely of bonds maturing in 1, 3 and 5 years
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Portfolio D, which consists solely of bonds maturing in 20, 25 and 30 years
Frage 6
Frage
Why do portfolios need a regular annual or periodic review?
Antworten
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To ensure that all assets are priced on a regular basis
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To ensure that all assets are reconciled against the market
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To ensure that all cash balances are reconciled against the actual bank
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To ensure the portfolio still meets the client's objectives and is positioned correctly given the market conditions
Frage 7
Frage
The excess return of a portfolio or security above that of the risk adjusted benchmark is known
as:
Antworten
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alpha
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beta
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duration
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premium
Frage 8
Frage
An investment manager believes that markets are inefficient and that he can obtain abnormal
returns after transaction charges. Which investment style is he most likely to adopt?
Antworten
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Passive
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Indexation
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Active
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Satellite
Frage 9
Frage
An individual has been advised to invest in some shares by a friend. He wants to make sure that
he invests in companies which do not have a volatile share price. To achieve this he should
select shares which have a beta factor of:
Antworten
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1
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1.25
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1.5
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1.75
Frage 10
Frage
Which of the following is a feature in Arbitrage Pricing Theory (APT)?
Antworten
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APT relies on identified factors being correlated
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The variables of APT include real economic factors
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The principal component of APT is the return on an index of all shares
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APT is equivalent to a single factor Capital Asset Pricing Model
Frage 11
Frage
Based on the principles of Modern Portfolio theory, an equity fund will operate on the
'efficient frontier' if:
Antworten
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the optimum level of systematic risk is obtained
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the best level of diversification is achieved
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the fund's alpha value is negative
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the fund's beta value is one or more
Frage 12
Frage
Bond portfolio X exclusively contains relatively long-dated stock whereas Bond portfolio Y
operates a laddering strategy. This means that Bond X is likely to:
Antworten
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generate higher yields
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present less of a credit risk
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be more sensitive to interest rate changes
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represent a more diversified approach
Frage 13
Frage
In which country can shareholders be assured that listed companies will comply with the OECD
Principles for Corporate Governance?
Antworten
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France
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Germany
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UK
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USA
Frage 14
Frage
An investor has a requirement for an 8% return and is considering choosing Stock X to satisfy
this need. Based on the Capital Asset Pricing Model, if the beta value of this stock is
recalibrated from 1.2 to 1.3, this would:
Antworten
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increase the likelihood that the stock would be suitable
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decrease the likelihood that the stock would be suitable
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automatically trigger an increase in the investor's required rate
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automatically trigger a decrease in the investor's required rate
Frage 15
Frage
Using Modern Portfolio Theory to create a two stock portfolio, which of the following is TRUE?
Antworten
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The lower the correlation of stock returns, the greater the portfolio's diversification
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The higher the correlation of stock returns, the greater the portfolio's diversification
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The higher the correlation of stock returns, the lower the level of total risk associated with any given level of expected return
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The lower the correlation of stock returns, the higher the level of total risk associated with any given level of expected return
Frage 16
Frage
Which of the following does a passive investment manager principally invest in?
Antworten
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Equities
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An index
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Fixed income
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Other institutional funds
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