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Unformatted text preview: True / False Questions 3019B/6005V
1. Shares of closed-end mutual funds are traded at net asset value (NAV).
TRUE / FALSE 2. A load is a sales charge, paid to the seller of a fund.
TRUE / FALSE 3. Exchange traded funds (ETF’s) can only be bought at the end of the day, like
TRUE / FALSE 4. Fund managers may not use 12b-1 charges to pay the brokers who sell the fund to
TRUE / FALSE 5. Back-end loads usually are lower than the operating expenses of a fund.
TRUE / FALSE 6. The Fama & French model takes into account momentum returns.
TRUE / FALSE 7. The risk-adjusted performance of European mutual funds tends to be positively
correlated to the expense ratio.
TRUE / FALSE 8. The hot-hands effect states that funds that performed well in the past will
continue to do so in the future.
TRUE / FALSE 9. Hedge fund managers are subject to the “fulcrum rule”.
TRUE / FALSE 10. US Hedge funds do not have to report anything to the SEC.
TRUE / FALSE 11. Hedge fund styles are typically based on absolute return strategies.
TRUE / FALSE 12. Trend following hedge funds perform best in calm markets.
TRUE / FALSE 13. Long Term Capital Management (LTCM) described itself as a fixed income
arbitrage hedge fund.
TRUE / FALSE 14. The first hedge funds mainly intended to hedge against the likelihood of a
TRUE / FALSE 15. If a hedge fund has a negative performance, no management fees have to be paid.
TRUE / FALSE 16. Full transparency on hedge fund portfolio holdings increases hedge fund returns.
TRUE / FALSE 17. Indirect Real Estate is considered to be a good inflation hedge.
TRUE / FALSE 18. The Fisher equation establishes the relationship between nominal asset returns,
real asset returns and expected inflation.
TRUE / FALSE 19. Direct Real Estate returns are highly correlated to indirect Real Estate returns.
TRUE / FALSE 20. Because of the underestimation of volatility, direct Real Estate receives a high
weight in mean-variance analysis.
TRUE / FALSE 21. Direct Real Estate is lumpy.
TRUE / FALSE 22. An advantage of indirect over direct Real Estate is the higher diversification
possibilities, if combined with stocks.
TRUE / FALSE 23. The CAPM (or market approach) leads to an allocation to Real Estate which is
equal to the importance of Real Estate in the capital market.
TRUE / FALSE 24. Pension funds should invest more in direct Real Estate as they have
TRUE / FALSE 25. Direct Real Estate indices are based on appraisals.
TRUE / FALSE ...
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- Spring '11