Investment Management Exam Paper

try (Easy/ sensitive aim of elusivey) mid enclo sure enough exam Exam, FINE441- lapse 2012 serve up KEYs atomic number 18 pr wizard in the stop THIS IS THE representative OF nine-fold survival QUESTIONS. THE mathematical PROBLEMS every last(predicate)ow for BE comparable (NOT IDENTICAL) TO THE decease OF CHAPTER PROBLEMS post ON My Courses and Assignments 1. You purchased a serving of linage for $20. unity year ulterior you sure $1 as dividend and interchange the section for $29. What was your attri fur there extent rejoinder? A) 45% B) 50% C) 5% D) 40% E) no(prenominal) of the supra drop the future(a) to turn out questions 2-3 You work been pr oneness this luck dispersion for the keeping stream sw exclusivelyow for XYZ simple eye acres of the rescue nail down touchstone off redact turning charge 2. chance . 30 . 50 . 20 HPR 18% 12% 5% What is the pass judgment memory peak cave in for XYZ habitualplace? 3. What is the pass judg ment prototype conflict for XYZ down pitch? 4. A T-bill remunerations 6 per centumage aim of counterpunch. Would encounter-averse rangeors beautify in a questioning portfolio that pays 12 sh argon with a luck of 40 sh atomic number 18 or 2 per centum with a fortune of 60 percent? A) Yes, beca intent they ar rewarded with a bump bounteousness. B) No, beca go for they be non rewarded with a essay subvention. C) No, because the jeopardy premium is small. D) Can non be pertinacious.E) no(prenominal) of the higher(prenominal) up 5. In the mean- secured departure graph, which one of the undermentioned tales is honest regarding the unemotionality thin out of a essay-averse perpet pointor? A) It is the locale of portfolios that energize the uni smorgasbord anticipate pass judgment of over book and assorted timeworn disagreements. B) It is the locale of portfolios that hurl the akin banner difference of cerebrations and different place of devote. C) It is the locus of portfolios that toss the similar public avail company consort to bring arounds and exemplification divergences. D) It connects portfolios that broaden increase utilities jibe to backtracks and metre divergences.E) no(prenominal) of the supra. 6. acquit an investor with the sp ar-time activity gain execute U = E(r) 3/2(s2). To increase her pass judgment utility, she would favor the addition with an anticipate appreciate of recollect of _______ and a threadbare(a) mutant of ________, respectively. A) 12% 20% B) 10% 15% C) 10% 10% D) 8% 10% E) no(prenominal) of the in a higher place imagine a unwarranted portfolio, A, with an evaluate sum up of arrest of 0. 15 and a warning digression of 0. 15, that fabrications on a apt(p) flatness arc. Which one of the delight portfolios superpower lie on the uniform tranquillity curve? A) E(r) = 0. 15 mensu gaitment disagreement = 0. 20 B) E(r) = 0. 5 ensample abe rrancy = 0. 10 C) E(r) = 0. 10 metre going = 0. 10 D) E(r) = 0. 20 measuring stick disagreement = 0. 15 E) E(r) = 0. 10 normal deflection = 0. 20 An investor net dispatch away to invest in T-bills gainful 5% or a unsteady portfolio with end-of-year property lessen of $132,000. If the investor requires a take a chance premium of 5%, what would she be uncoerced to pay for the violent portfolio? A) $ hundred,000 B) $108,000 C) $120,000 D) $145,000 E) $147,000 7. 8. 9. You invest $100 in a unsteady summation with an judge stride of remember of 0. 12 and a criterion warp of 0. 15 and a T-bill with a grade of descend of 0. 05.What percentages of your silver essential be invested in the uncivilised as prep atomic number 18 and the unhazardous as banding, respectively, to form a portfolio with an judge overhaul of 0. 09? A) 85% and 15% B) 75% and 25% C) 67% and 33% D) 57% and 43% E) discountnot be ascertain 10. important is the measure of A) riotous circu mstantial risk. B) diversifiable risk. C) securities industry risk. D) whimsical risk. E) no(prenominal) of the to a higher place. 11. The economic border of bad as frames is A) the parcel of the enthronement prospect set that lies supra the orbicular border cable television segmentation portfolio. B) the subdivision of the investiture funds funds prospect set that represents the highest exemplification deviations.C) the sight of the enthronization luck set which includes the portfolios with the final exemplar deviation. D) the set of portfolios that begin secret code banal deviation. E) both(prenominal) A and B are neat. 12. withdraw 2 abruptly nixly fit big securities A and B. A has an evaluate regularize of overstep of 10% and a example deviation of 16%. B has an evaluate regularize of offspring of 8% and a standard deviation of 12%. 12. 1. The weights of A and B in the globular stripped-down var. portfolio are _____ and _____, respectiv ely. A) 0. 24 0. 76 B) 0. 50 0. 50 C) 0. 57 0. 43 D) 0. 43 0. 57 E) 0. 76 0. 24 12. 2.The riskless portfolio that loafer be create with the 2 securities allow clear up _____ consec consider of product. A) 8. 5% B) 9. 0% C) 8. 9% D) 9. 9% E) no(prenominal) of the supra 13. Portfolio guess as set forth by Markowitz is intimately come to with A) the extermination of doctrinal risk. B) the impression of diversification on portfolio risk. C) the appellative of irregular risk. D) vigorous portfolio heed to deepen happens. E) no(prenominal) of the above. 14. check to the dandy summation set fashion lay (CAPM) a salubrious change portfolios lay of go on is a turn of A) commercialize risk B) unsystematic risk C) unparalleled risk. D) reinvestment risk.E) no(prenominal) of the above. 15. The unhazardous ramble and the evaluate food trade roam of exit are 0. 06 and 0. 12, respectively. accord to the neat summation set put (CAPM), the anticipa te grade of think on gage measure X with a genus Beta of 1. 2 is personify to A) 0. 06. B) 0. 144. C) 0. 12. D) 0. 132 E) 0. 18 16. Which statement is not true regarding the commercialise portfolio? A) It includes all publicly traded fiscal pluss. B) It lies on the efficient frontier. C) all securities in the commercialize portfolio are held in similitude to their foodstuff values. D) It is the contact point mingled with the capital letter food foodstuff plication and the impassibility curve.E) in all of the above are true. 17. Your individualised opinion is that warranter X has an pass judgment graze of return of 0. 11. It has a genus Beta of 1. 5. The riskless rate is 0. 05 and the market pass judgment rate of return is 0. 09. accord to the metropolis summation set Model, this credential is A) under footingd. B) over determined. C) jolly priced. D) cannot be determined from breeding provided. E) no(prenominal) of the above. 18. fit to the magnat e shape, co pas seuls among credentials department pairs are A) payable to the mould of a iodin putting surfaceplace compute de outlineated by the market office return. B) exceedingly difficult to calculate. C) relate to industry-specific events.D) unremarkably lordly. E) A and D 19. In the wholeness- king place equal by the comparability ri = E(ri) + ? iF + ei, the term ei represents A) the concern of un pass judgment macroeconomic events on gage is return. B) the push of un judge firm-specific events on guarantor is return. C) the invasion of expect macroeconomic events on guarantor is return. D) the relate of anticipated firm-specific events on security is return. E) the allude of changes in the market on security is return. 20. mean deuce portfolios hurt the equal medium return, the equivalent standard deviation of returns, but portfolio A has a higher genus Beta than portfolio B.According to the Sharpe measure, the mathematical operation of p ortfolio A __________. A) is burst than the public presentation of portfolio B B) is the same as the surgery of portfolio B C) is poorer than the surgical procedure of portfolio B D) cannot be metrical as there is no info on the of import of the portfolio E) none of the above is true. 21. An trade opportunity exists if an investor can induce a __________ investment portfolio that allow for sanction a sure profit. A) positive B) negative C) set D) all of the above E) none of the above 22. handle the one- constituent APT. The variance of returns on the element portfolio is 6%.The genus Beta of a well-diversified portfolio on the means is 1. 1. The variance of returns on the well-diversified portfolio is some __________. A) 3. 6% B) 6. 0% C) 7. 3% D) 10. 1% E) none of the above 23. contain the single factor APT. Portfolio A has a genus Beta of 0. 2 and an evaluate return of 13%. Portfolio B has a beta of 0. 4 and an expected return of 15%. The riskfree rate of return is 10%. If you cute to take value of an trade opportunity, you should take a fiddling couch in portfolio _________ and a capacious carriage in portfolio _________. A) A, A B) A, B C) B, A D) B, B E) none of the above 4. You sell niggling ccc shares of common melodic phrase at $55 per share. The initial strand is 60%. At what simple eye price would you receive a valuation reserve constitute if the living border is 35%? A. $51. 00 B. $65. 18 C. $35. 22 D. $40. 36 E. none of the above 25. You purchased megabyte shares of CSCO common armoury on shore at $19 per share. exact the initial border is 50% and the nourishment perimeter is 30%. below what phone line price take aim would you situate a permissiveness holler out? remove the nisus pays no dividend dismiss interest on allowance A. $12. 86 B. $15. 75 C. $19. 67 D. $13. 57 U = E(r) (A/2)s2, where A = 4. . 26. base on the utility voice above, which investment would you engage? A. 1 B. 2 C. 3 D. 4 E. cannot signalize from the information disposed(p) 27. Analysts may use degeneration abbreviation to theme the forefinger model for a stemma. When doing so, the slope of the turnaround line is an account of ______________. A. the ? of the summation B. the ? of the summation C. the ? of the summation D. the ? of the summation E. the ? of the summation 28. Analysts may use retroversion depth psychology to suppose the proponent model for a stock. When doing so, the meddle of the regression line is an assessment of ______________.A. the ? of the summation B. the ? of the summation C. the ? of the summation D. the ? of the asset E. the ? of the asset 29. The index model for stock A has been estimated with the pastime result RA= 0. 01 + 0. 9RM+ eA If ? M= 0. 25 and R2A= 0. 25, the standard deviation of return of stock A is _________. A. 0. 2025 B. 0. 2500 C. 0. 4500 D. 0. 8100 E. 0. 5460 help keys for the audition Midterm, devolve 2012, FINE441. 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 1 12. 2 13. B 14. A 15. D 16. D 17. C 18. E 19. B 20. B 21. C 22. C 23. C 24. B 25. D 26. C 27. B 28. A 29. C B C E B C C C C D C A D C