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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.

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4. According to the capital asset pricing model, a security with a __________.
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Conceptual Exam2 (1) - FI 312 EXAM 2 How to Study For Exam...

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