Question

41. An investor who holds a portfolio a. Owns investments in several industries. b. Owns more than one investment. c. Owns both bonds and stocks. d. Has invested an equal amount in several securities.

42. The rate of return from a portfolio is: a. Always greater than the return from any security within the portfolio. b. Equal to the rate of return from the best performing security in the portfolio. c. The weighted average of the rates of return of the securities in the portfolio. d. Not related to the rates of return of the securities in the portfolio.

43. What is the expected rate of return from the following portfolio: investor who holds a portfolio: Securit Expected Amount y A Return 12% Invested $ 20,000 B 15% $ 30,000 a. 11.75%. C 10% $ 50,000 b. 11.90%. c. 12.33%. d. 15.00%.

44. Compared to a domestic portfolio, a portfolio of equal size that is diversified across countries will have: a. Less systematic risk. b. Less unsystematic risk. c. A greater rate of return. d. A higher expected value.

45. The present value of cash flows to be received in the near term: a. Is more volatile than the present value of cash flows to received further in the future. b. Is equally volatile as the present value of cash flows to received further in the future. c. Is less volatile than the present value of cash flows to received further in the future. d. Has no relationship to the present value of cash flows to received further in the future.

46. In the Fisher model, nominal rates are comprised of the pure rate, the inflation premium, and the: a. Expected base level of rates. b. Transaction premium. c. Risk premium. d. Expected rate of inflation.

47. The rate of interest that would exist if there were no anticipated inflation or forecasted risk is the: a. Pure rate. b. Nominal rate. c. Forward rate. d. Risk-free rate.

48. The inflation premium represents rates to compensate a. Historic; lenders b. Expected; lenders c. Anticipated; borrowers d. Historic, borrowers inflation and is built into nominal interest for their expected loss in purchasing power.

49. The theories of the term structure of interest rates attempt to measure variations in interest rates by: a. Time. b. Risk differences. c. Issuer of securities. d. Anticipated inflation.

50. The term structure of interest rates refers to the relationship between:

A. Time and tax rate. B. Risk and time.C.Liquidity and risk.D.Yield and maturity.

Answer 1

41. An investor who holds a portfolio : "c. Owns both bonds and stocks."

42. The rate of return from a portfolio is : "c. The weighted average of the rates of return of the securities in the portfolio."

43. What is the expected rate of return from the following portfolio: investor who holds a portfolio: Securit Expected Amount : "b. 11.90%"

44. Compared to a domestic portfolio, a portfolio of equal size that is diversified across countries will have: "b. Less unsystematic risk."

45. The present value of cash flows to be received in the near term: "c. Is less volatile than the present value of cash flows to received further in the future."

46. In the Fisher model, nominal rates are comprised of the pure rate, the inflation premium, and the: "d. Expected rate of inflation."

47. The rate of interest that would exist if there were no anticipated inflation or forecasted risk is the: "a. Pure rate."

48. The inflation premium represents rates to compensate: "d. Historic, borrowers inflation and is built into nominal interest for their expected loss in purchasing power."

49. The theories of the term structure of interest rates attempt to measure variations in interest rates by: "a. Time."

50. The term structure of interest rates refers to the relationship between: "D.Yield and maturity."