Practice Quiz for Chapter 2
1
Which one of the following is not a money market instrument?
A) a Treasury bond
B) a negotiable certificate of deposit
C) a Eurodollar account
D) a Treasury bill
E) commercial paper
2
The bid price of a T-bill in the secondar
Chapter 15 Practice Quiz
1
The yield curve shows at any point in time
A) the relationship between yield on a bond and the time to maturity on the bond.
B) the relationship between the coupon rate on a bond and time to maturity of the bond.
C) the relation
Chapter 19 Practice Quiz
1
To create a common size income statement _ all items on the income statement by
_.
A) multiply; net income
B) multiply; total revenue
C) divide; net income
D) divide; total revenue
E) multiply; COGS
2
If a firm has "goodwill" re
Practice Test for Chapter 1
1
The net wealth of the aggregate economy is equal to the sum of
A) all real assets.
B) all financial assets.
C) all physical assets.
D) all real and financial assets.
E) none of the above
2
Asset allocation refers to _.
A) cho
Chapter 28 Practice Quiz
1
_ refer to strategies aimed at attaining the established rate of return requirements while
meeting expressed risk tolerance and applicable constraints.
A) Investment constraints
B) Investment objectives
C) Investment policies
D)
Chapter 26 Practice Quiz
1
Unlike mutual funds, hedge funds
A) allow private investors to pool assets to be managed by a fund manager.
B) are commonly organized as private partnerships.
C) are subject to extensive SEC regulations.
D) are typically only op
Chapter 23 Practice Quiz
1
If a stock index futures contract is overpriced, you would exploit this situation by
A) selling both the stock index futures and the stocks in the index.
B) buying the stock index futures and selling the stocks in the index.
C)
Chapter 21 Practice Quiz
1
Portfolio A consists of 150 shares of stock and 300 calls on that stock. Portfolio B consists of 575 shares
of stock. The call delta is 0.7. Which portfolio has a higher dollar exposure to a change in stock price?
A) Portfolio B
Chapter 16 Practice Quiz
1
The duration of a bond is a function of the bond's
A) coupon rate.
B) time to maturity.
C) yield to maturity.
D) all of the above
E) none of the above
2
The "modified duration" used by practitioners is equal to the Macaulay dura
Chapter 11 Practice Quiz
1
If you believe in the _ form of the EMH, you believe that stock prices reflect all relevant
information including historical stock prices and current public information about the firm, but not
information that is available only
Chapter 9 Practice Quiz
1
In the context of the Capital Asset Pricing Model (CAPM) the relevant measure of risk is
A) unique risk.
B) beta.
C) standard deviation of returns.
D) variance of returns.
E) none of the above.
2
Which statement is not true regar
Chapter 8 Practice Quiz
1
The Security Risk Evaluation book published by Merrill Lynch relies on the _ most recent
monthly observations to calculate regression parameters.
A) 12
B) 36
C) 60
D) 120
E) none of the above
2
Suppose the following equation best
Chapter 7 Practice Quiz
1
The standard deviation of a two-asset portfolio is a linear function of the assets' weights when
A) the assets have a correlation coefficient less than zero.
B) the assets have a correlation coefficient equal to zero.
C) the asse
Chapter 5 Practice Quiz
1
Skewness is a measure of _.
A) how fat the tails of a distribution are
B) the downside risk of a distribution
C) the normality of a distribution
D) the dividend yield of the distribution
E) A and C
2
When a distribution is positi