Bond and Net Asset Value
Practice questions
Quiz 1
FIR 3710 Investments
1. Why are derivatives potentially dangerous? A) They involve leverage. B) They are used to hedge. C) They are a tool for risk management. D) There are more than 1200 different derivatives on the market.
2. __________ assets generate net income to the economy and __________ assets define allocation of income among investors. A) Financial, financial B) Financial, real C) Real, financial D) Real, real
3. Asset allocation refers to the __________. A) allocation of the investment portfolio across broad asset classes B) analysis of the value of securities C) choice of specific assets within each asset class D) none of the above
4. A __________ represents an ownership share in a corporation. A) call option B) common stock C) fixed-income security D) none of the above
5. __________ portfolio management calls for holding diversified portfolios without spending effort or resources attempting to improve investment performance through security analysis. A) Active B) Idiotic C) Passive D) none of the above
6. Security selection refers to __________. A) choosing specific securities within each asset-class B) deciding how much to invest in each asset-class C) deciding how much to invest in the market portfolio versus the riskless asset D) none of the above
7. The success of common stock investments depends on the success of __________. A) derivative securities B) fixed income securities C) the firm and its real assets D) none of the above
8. __________ is a true statement. A) Dividends on preferred stocks are
Quiz 1
FIR 3710 Investments
1. Why are derivatives potentially dangerous? A) They involve leverage. B) They are used to hedge. C) They are a tool for risk management. D) There are more than 1200 different derivatives on the market.
2. __________ assets generate net income to the economy and __________ assets define allocation of income among investors. A) Financial, financial B) Financial, real C) Real, financial D) Real, real
3. Asset allocation refers to the __________. A) allocation of the investment portfolio across broad asset classes B) analysis of the value of securities C) choice of specific assets within each asset class D) none of the above
4. A __________ represents an ownership share in a corporation. A) call option B) common stock C) fixed-income security D) none of the above
5. __________ portfolio management calls for holding diversified portfolios without spending effort or resources attempting to improve investment performance through security analysis. A) Active B) Idiotic C) Passive D) none of the above
6. Security selection refers to __________. A) choosing specific securities within each asset-class B) deciding how much to invest in each asset-class C) deciding how much to invest in the market portfolio versus the riskless asset D) none of the above
7. The success of common stock investments depends on the success of __________. A) derivative securities B) fixed income securities C) the firm and its real assets D) none of the above
8. __________ is a true statement. A) Dividends on preferred stocks are