单选题An analyst does research about the portfolio's standard deviation of return. A portfolio consisting of two securities has the following characteristics: Security Portfolio Weight Standard Deviation 1 35% 16% 2 65% 19% If the correlation of returns between the two securities is -0.25, the portfolio's standard deviation of return is closest to: A. 12.22% B. 14.78% C. 14.93%
单选题The use of interest rates to forecast future stock prices is ruled out by which form of market efficiency? A. weak form. B. semi-strong form. C. both A and B.
单选题An analyst does research about margin transaction. An investor purchases common shares at $ 25 per share on margin and deposits just enough money to cover the 65% initial margin requirement. If the maintenance margin requirement is 30%, the share price below which the investor will first receive a margin call is closest to: A. $11.54 B. $12.50 C. $19.70
单选题A CDO issued to profit on the spread between the return on the underlying assets and the return paid to investors is referred to as a(n):
单选题An analyst gathers the following information about Sunshine Industry and its common stock: Common annual dividend per share (D0) $3.50 Growth rate of dividends 7% Required rate of return on the stock 16% Using the Gordon growth model, the value of Sunshine's common stock is closest to: A. $23.41 B. $38.89 C. $41.61
单选题The Objectives part of the investment policy statement serves to: A. set out what the invested money will be used for. B. establish the benchmarks to be used in evaluating performance of the investments. C. express the expected risk and return for the invested capital.
单选题An analyst does research about asset classes. When an investor defines an asset class for the purpose of asset allocation, which of the following statements is most accurate? The investor should ensure that assets in one class: A. have high paired correlations with other asset classes and relatively homogeneous. B. have low paired correlations with other asset classesand relatively heterogeneous. C. have low paired correlations with other asset classesand relatively homogeneous.
单选题Dacon Inc. has a capital structure consisting of $40 million of liabilities and $50 million of equity. Dacon issues $3 million of preferred shares and $5 million of bonds with warrants attached (debt component comprises 70% of the value) for total cash proceeds of $8 million. Which of the following amounts is the revised debt-total capital ratio upon the issuance of the two new financial instruments?
单选题June Rutherford is preparing a research report on Andronicus Fund, an offshore hedge fund that specializes in identifying market pricing inefficiencies and profiting from the arbitrage opportunities they present. Rutherford includes these statements in her report:
Statement 1: The rate of return that investors require from Andronicus should reflect the risk that the fund managers will not consistently capture positive abnormal returns from the anomalies they have identified.
Statement 2: Arbitrage trading is unlikely to bring about fully efficient prices because Andronicus and other arbitrageurs will not trade if the gains to be captured are less than their transactions costs. Are Rutherford's statements correct?
Statement 1 Statement 2
①A. Correct Correct
②B. Correct Incorrect
③C. Incorrect Correct
A. ①B. ②C. ③
单选题Holding all other factors constant, an increase in expected yield volatility will cause the price of: A. a putable bond to increase. B. a callable bond to increase. C. embedded put and call options to decrease.
单选题A company that prepares its financial statements in accordance with International Financial Reporting Standards (IFRS) uses the revaluation model to value land
单选题Which of the following assumptions associated with the capital asset pricing model (CAPM), when relaxed, will be least likely to result in turning the security market line (SML) into a band rather than a line?
单选题Yamaska Mining issued a. 5-year, $ 50 million face,6% semiannual bond
when market interest rates were at 7%. What is the initial balance sheet
liability and what is the cumulative interest expense (in dollars) that the
company should report following the first half of the second year of the bond's
life (the third semiannual period)?
Initial liability Cumulative interest expense to end
of first half of year 2 ①A. $ 47920849
$4500000 ②B. $ 47920849
$ 5051494 ③C. $ 50000000
$ 9000000
A. ①
B. ②
C. ③
单选题Enamel Manufacturing (EM) is considering investing in a new vehicle. EM
finances new projects using retained earnings and bank loans. This new vehicle
is expected to have the same level of risk as the typical investment made by EM.
Which one of the following should the firm use in making its decision?
A. After-tax cost of debt.
B. Marginal cost of capital.
C. Cost of preferred stock.
单选题An analyst gathers the following data about a company:
stock price
$40
stock's required return
12%
consensus estimate of next year's dividend
$2
company's return on equity
10% Using the dividend discount
model, the company's dividend payout ratio is closest to:
A. 5%
B. 30%
C. 70%
单选题According to the Standards of Practice Handbook, which of the following is most directly responsible for enforcement of the Code of Ethics and Professional Conduct Standards? A. CFA Institute Disciplinary Review Committee. B. CFA Institute member volunteers affiliated with disciplinary Review Committee. C. CFA Institute Designated Officer.
单选题An U. S. Treasury bill (T-bill) with a face value of $100000 matures in 270 days. If the T-bill is currently selling for $96910, the bank discount yield is closest to: A. 2.32% B. 3.09% C. 4.12%
单选题The money-weighted rate of return on the investment is:
单选题Which of the following most accurately describes the relationship between the average total cost (ATC) curve and the average variable cost (AVC) curve? The vertical distance between the ATC and AVC curves: A. decreases as output increases. B. increases as output increases. C. remains constant as output increases.
单选题Using hypothesized parameter values and a random number generator to study the behavior of certain asset returns is part of: