Bus172B-FinalExamPracticeProbs

Bus172B-FinalExamPracticeProbs - I I' ')Lt 'J i) tr:-"...

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i) tr:-" I 'J 'Z' tB I ')Lt * I' . l-.)1, ' [) 1- -J ' :'t! '' t I ,-.,.,".r l"'*
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The following data appty to questions 29-30. Five psrff'tbos, A-E. have the foilowing data A B C D E Beta t.45 0.95 I t.45 0-95 R' 90 95 100 80 100 29. Which is likely to have the greatest total risk (Sigma)? a.A b.B c.C @n e.E 30. Which is likely to have the least total risk (Sigma)? a.A b.B c.C d.D @n 31. Which of the folloqing is true? a. Load funds are bought by investors directly from the fi.rnd company. b. 401(k)s are employee-sponsored and IRAs are employer-sponsored. c. Class A shares are No Load funds. d. Investnents in the "Investrnent" Vehicle (as opposed to the "Retirement" Vehicle) are permitted tax advantages. @ "Break points" are a mechanism for reducing the front-end load for A shares for larger amounts invested. 32. Of the following statements, select the one which describes Warren Buffet's practice of diversification. Warren Buffet: a- Practices diversification because it gives him the maximum return for a given risk. b. Practices diversification because it gives him the minimurn risk. c. Does not practice diversification because he wants to reduce risk. d. Does not practice diversification because he is not averse to risk. S) Oo"t not practice diversification because he believes he can increase his retum by making concentrated investnents. 0ai
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are Returns I 2 3 4 4 6 -1 3 A 6 9 -1.5 4.5 B 4 7 -2 3 >=< The following data appty to questions 1-2. The follo retums for the S&P500 and stocks A and B over four periods, 1-4- t. The closest B (beta) and Rz for A are ) The closest B (beta) and R2 for B are B a.2 6? r.s c. 1.0 d. 1.5 e.2 B @To -b. 1.0 c. 1.5 d. 1.5 e. 2.0 R2 1.0 1.0 1.0 ' 0.8 0.8 R2 0.8 1.0 0.8 1.0 0.8 il v I'tul l-,6nn, $r $c1u,rq L,o Lop Lo,"rV.^rr Lt'tw [" nr.5 t"\n.tt.ilq L,llt,. Ln*g^.1u )noo.,'i6 Li,\h\t Urlir $ o n rro,f ,^J )i lv 0,. l \^, A !: \,r,i ! H,tnuUnon F r,rrr L\i n L<b,.rr Wot ('lf LW P.nn Hu1*, 5tur. 4^nrrkz o, qz Kortr,,4 fla;,u
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I'hd fotlowing asset allocations apply to three target retirement funds, A, B. and C, for dates 2015, 2030, a,nd2045. A B C Intermediate Term Bonds 50o/o 3}Vo l0o/o U.S. Total StockMarket 40o/o 5SYo 70% International Stock Market 10o/o I5o/o 20o/o 16. The2045 fi.rnd applies to fund: A B C 17. The 2030 frrnd applies to fund: ^.A @n c.C 18. Which of the following is not true. a. In general, an older person is less risk tolerant. b. In general, a more wealthy person is more risk tolerant. % In general, a person with a longer investonent horizon is more risk tolerant. (d. )
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Bus172B-FinalExamPracticeProbs - I I' ')Lt 'J i) tr:-&quot;...

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