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WorksheetsPortfolio Management
Total questions: 15
Worksheet time: 15mins
Most investors are risk averse which means:
they will assume more risk only if they are compensated by higher expected return
they will always invest in the investment with the lowest possible risk
they actively seek to maximize their return
they avoid the stock market due to the high degree of risk
stocks and bonds should be classified as;
Real Asset
Indirect Asset
Financial Assets
personal assets
The ________ of an asset is the change in value plus any cash distributions expressed as a percentage of the initial price or amount invested.
Return
Value
Risk
Probability
________ is the chance of loss or the variability of returns associated with a given asset.
Return
Value
Risk
Probability
Last year Mike bought 100 shares of Dallas Corporation common stock for $53 per share. During the year he received dividends of $1.45 per share. The stock is currently selling for $60 per share. What rate of return did Mike earn over the year?
11.7%
13.2%
14.1%
15.9%
Investors should not diversify their portfolio by putting money into different securities based on their appetite for risk.
True
False
Who are institutional investors in Financial assets? ( Choose 3)
Investment Companies
Government
Commercial Banks
Householders
Insurance Companies
After considering current market conditions an investor decides to place 60% of their funds in equities and the rest in bonds. This is an example of
security analysis
asset allocation
top down portfolio management
passive management
After much investigation an investor finds that Intel stock is currently under priced. This is an example of ______.
Asset allocation
Security analysis
passive management
top down portfolio management
........... ......... advise companies on issuing bonds and shares. They also advise on mergers and acquisitions Choose one
Investment Companies
Investment banks
Commercial Banks
Insurance Companies
__________ portfolio construction starts with asset allocation.
Bottom-up
Top Down
Upside down
Side-by-side
Which of the following is the best reason for an investor to be concerned with
the composition of a portfolio?
Risk reduction
Downside risk protection
Avoidance of investment disaster
Increase profitabiltiy
With respect to the portfolio management process, the asset allocation is deter-
mined in the:
planning step
feedback step
execution step
An analyst gathers the following information for the asset allocations of three
portfolios (see attachment). Which of the portfolios is most likely appropriate for a client who has a high
degree of risk tolerance?
Portfolio 1
Portfolio 2
Portfolio 3
Portfolio 1 & 3
Which of the following forms of pooled investments is subject to the least
amount of regulation?
Hedge Funds
Exchange Traded Funds
Closed-End Mutual Funds
Open-End Mutual Fund
