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1.Increasing Investment horizon ____________________ investor's risk taking ability, while decreasing liquidity requirements _____________________ investor's risk taking ability. Group of answer choices a)increases; decreases b)decreases; increases

1.Increasing Investment horizon ____________________ investor's risk taking ability, while decreasing liquidity requirements _____________________ investor's risk taking ability.

Group of answer choices

a)increases; decreases

b)decreases; increases

c)decreases; decreases.

d)does not affect; increases

e)increases; increases

2.

Tracking Error can be calculated Either by running an OLS regression of a fund/portfolio against its benchmark OR by calculating the standard deviation of the difference in returns between the Fund/portfolio and its Benchmark. Tracking Error calculated by running an OLS regression of the fund/portfolio against its benchmark will be a _____________ value than when calculated using the standard deviation of the difference in returns between a fund/portfolio and its benchmark, because ___________________________.

Group of answer choices

a)same or higher; OLS regressions are affected by multi-collinearity

B)lower; OLS regressions minimise the sum or square of errors.

c)same; tracking error is generated by creating the portfolio different from the benchmark and has no relevance on the methodology of calculation

d)higher; OLS regression adjusts for the beta

e)lower; OLS regressions adjusts for the degrees of observations

3.

University Endowment funds usually restrict Portfolio Managers' direct usage of leverage, derivatives and short selling because:

Group of answer choices

a)Regulations on short positions, leverage and derivatives can change frequently

B)Portfolio Managers may generate very high returns that may impact the fund negatively

c)Derivatives, Short selling and Leverage increase the risk of the fund

d)Short selling, derivatives, and leveraged positions require margin calls.

e)Portfolio Managers do not understand how to use leverage, derivatives, and short position effectively

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