Please choose the right answer choice for each question. 1) The slope of the uti
ID: 2736837 • Letter: P
Question
Please choose the right answer choice for each question.
1)
The slope of the utility curves for a strongly risk-averse investor, relative to the slope of the utility curves for a less risk-averse investor, will
Be steeper.
Be flatter.
Be vertical.
Be horizontal.
None of the above.
2) All of the following are assumptions of the Markowitz model except
Beta is a measure of:
Company specific risk
Industry risk
Diversifiable risk
Systematic risk
Unique risk
3The Efficient Frontier refers to a set of portfolios that
The market portfolio consists of all
When identifying undervalued and overvalued assets, which of the following statements is false?
A price range at which technicians feel that a significant increase in the price of the stock will be resisted is referred to as
4)The ratio of OTC volume versus NYSE volume is a measure of ____. This ratio typically ____ at a market ____.
A technical analyst might consider the following a bearish signal.
Adding international investments to an all U.S. portfolio will most likely:
Which of the following investments can be purchased with future contracts?
What type of mutual fund issues "redeemable securities" meaning that the fund stands ready to buy or sell the shares at their net asset value with a transaction fee?
Municipal bonds are sold using the following method or methods:
When a market is externally efficient, it means that
An individual investor's utility curves specify the tradeoffs he or she is willing to make between
As the correlation coefficient between two assets decreases, the shape of the efficient frontier
In a value weighted index
A price range at which technicians would expect a substantial increase in the demand for a stock is called
Demand threshold.
Resistance level.
Support level.
Resistance limit.
Technical restraint.
Exchange rate fluctuations have a large impact.
Exchange rate fluctuations have a small impact.
Large companies have a disproportionate influence on the index.
Small companies have an exaggerated effect on the index.
None of the above
approaches a horizontal straight line.
bends out.
bends in.
approaches a vertical straight line.
none of the above.
high risk and low risk assets.
high return and low return assets.
covariance and correlation.
return and risk.
efficient portfolios.
Timely and accurate information is available
The market is liquid
Transaction costs are low
Prices adjust rapidly to new information
The number of buyers and sellers are the same
Competitive bid
Negotiated sale
Private placement
All of the above
None of the above
No-load, closed-end fund
No-load, open-end fund
Load, closed-end fund
Load, open-end fund
None of the above
Commodities
T-bills
Treasury bonds
Eurobonds
All of the above
Fixed-income
Real estate
Real assets
Equities
Low liquidity investments
Increase the overall risk of the portfolio
Decrease the overall risk of the portfolio
Increase the expected return of the portfolio
Decrease the expected return of the portfolio
None of the above
Investments with predetermined contractual payments are known as:
The percentage of speculators in stock index futures exceeds 70%.
The percentage of speculators in stock index futures exceeds 30%.
The percentage of speculators in stock index futures falls to 30%.
The percentage of speculators in stock index futures remains flat.
None of the above.
Speculative activity, bottoms, peak.
Hedging activity, bottoms, peak.
Speculative activity, peaks, peak
Speculative activity, bottoms, bottoms.
None of the above.
Supply threshold.
Support level.
Short interest level.
Advancement level.
Resistance level.
An asset is properly valued if its estimated rate of return is equal to its required rate of return.
An asset is considered overvalued if its estimated rate of return is below its required rate of return.
An asset is considered undervalued if its estimated rate of return is above its required rate of return.
An asset is considered overvalued if its required rate of return is below its estimated rate of return.
None of the above (that is, all are true statements)
Lending, borrowing
Risk, return
Investing, financing
Risky assets, risk free assets
Buying stocks, buying bonds
New York Stock Exchange stocks.
High grade stocks and bonds.
Stocks and bonds.
U.S. and non-U.S. stocks and bonds.
Risky assets.
The separation theorem divides decisions on ____ from decisions on ____.
Have the highest expected return for a given level of risk.
Have the lowest risk for a given level of return.
Are dominant to all other portfolios.
a, b, and c above are correct.
None of the answers above are correct.
Risk is measured based on the variability of returns.
Investors maximize one-period expected utility.
Investors' utility curves demonstrate properties of diminishing marginal utility of wealth.
Investors base decisions solely on expected return and time.
All of the above
ABe steeper.
BBe flatter.
CBe vertical.
DBe horizontal.
ENone of the above.
Explanation / Answer
Answer 1 is A.
The slope of the utility curves for a strongly risk-averse investor, relative to the slope of the utility curves for a less risk-averse investor, will be steeper.
Answer 2 is C.
Beta is a measure of diversifiable risk.
Answer 3 is D.
The Efficient Frontier refer to a set of portfolios that have the highest expected return for a given level of risk, Have the lowest risk for a given level of return, and are dominant to all other portfolios.
Answer 4 is C.
The ratio of OTC volume versus NYSE volume is a measure of Speculative activity. This ratio typically peaks at a market peak.