Example Questions for Exam 1 CORRECT OR INCORRECT—place a “C” or an “I” in each blank. 1. As reported, municipal bond yields are stated on a before-tax basis. 2. As an investor, you can do direct investing, or you can do indirect investing, but you can’t do both. 3. If you were to construct a stock price index today, it would be price-weighted and not capitalization-weighted. 4. On an ex ante basis (before you invest), the return-risk tradeoff must always slope upwards. 5. Margin trading magnifies percentage gains and losses equally. 6. The maintenance margin requirement is set by exchanges or brokerage houses. 7. All mutual funds are open-end investment companies but closed-end funds are not investment companies. 8. For U. S. investors, if the dollar strengthens against a foreign currency, their returns from investments denominated in that currency are increased. 9. An investor holding a portfolio of small stocks should judge their performance by comparing them to the Russell 2000 Index.
This is the end of the preview. Sign up
access the rest of the document.
This note was uploaded on 11/17/2008 for the course BUS 422 taught by Professor Jones during the Spring '08 term at N.C. State.