Conceptual Exam2 (1)

Conceptual Exam2 (1) - FI 312 EXAM 2 How to Study For Exam...

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FI 312 EXAM 2 How to Study For Exam 2: Exam 2 will consist of 25 multiple choice questions from chapters 7 – 10 . There will be a mix of conceptual (about 10) and numerical (about 15) problems. The conceptual questions listed below cover the likely topics in exam 2. Also, pay attention to anything with an asterix. To prepare for the numerical problems, go over homework 2 again and make sure you can solve any worked problems we did in class. Exam 2 ~ Conceptual Questions 1. Building a zero-investment portfolio will always involve _____________ A. a mixture of short and long positions b. only short positions c. only long positions d. All of the above 2. A factor portfolio ____. a. is constructed so that the betas on all factors sum to one b. has a beta of 1.0 on all factors C. has a beta of 1.0 on one factor and a beta of zero on any other factor d. none of the above *This is important! 3. In a well diversified portfolio, __________ risk is negligible. a. nondiversifiable b. market c. systematic D. unsystematic
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4. According to the capital asset pricing model, a security with a __________. a. negative alpha is considered a good buy b. positive alpha is considered overpriced C. positive alpha is considered underpriced d. zero alpha is considered a good buy 5. The weak form EMH states that ________ must be reflected in the stock price. A. all market trading data b. all publicly available information c. all information including inside information d. none of the above 6. In a fully efficient market, consistent weak portfolio performance would most likely be due to
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This note was uploaded on 07/26/2011 for the course FIN 4133 taught by Professor Hearth during the Spring '11 term at Arkansas.

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Conceptual Exam2 (1) - FI 312 EXAM 2 How to Study For Exam...

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