A friend announces a plan to benchmark the performance of his small cap stocks with the S P 500 Which of the following concerns should dominate your thoughts The risk and return of small cap stocks and the S P 500 arent matched The comparison is inappropriate Problems with small cap benchmarking were recently revealed Russell 2000 index elements frequently change This investor is serious about managing his portfolio, and hes on the right track, though you have suggestions for fine tuning his approach The investors portfolio is too heavily weighted in small cap stocks This problem is an allocation error driven by demand for excess returns Suppose youre a mutual fund investor, and you want to minimize expenses while maximizing the probability of achieving performance that exceeds the performance of most mutual funds If you narrowed your alternatives to the following, which should you select Purchase an actively managed no load fund that doesnt charge 12b 1 fees and that invests in small cap stocks Purchase an index fund that mirrors the S P 500 Buy a WEBS tied to the Ireland stock market Buy the highest rated growth fund If you believe a stocks market value is about to drop, you could profit in the decline by the stock A assuming a long position in C assuming a short position in B assuming a bearish outlook on D placing a market order in One of the ways investors benefit from federal security laws is through A FDIC insurance, which protects investor principal B disclosures requiring that corporations reveal all information about the corporation C SIPC insurance, which protects market values from declining beyond a certain limit D disclosures and prohibitions that reduce the risk of stock price manipulation If you knew a bond would pay you $50 every year for 10 years and, at the end of the 10 years, youd also receive a $1,000 payment, how much should you pay to purchase the bond Assume similar bonds yield 8 percent, and select the value closest to the correct answer A Not more than $336 C Not more than $733 B Not more than $463 D Not more than $799

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A friend announces a plan to benchmark the performance of his small-cap stocks with the S&P 500. Which of the following concerns should dominate your

A friend announces a plan to benchmark the performance of his small-cap stocks with the S&P 500. Which of the following concerns should dominate your thoughts?
1. The risk and return of small-cap stocks and the S&P 500 arent matched. The comparison is inappropriate.
2. Problems with small-cap benchmarking were recently revealed. Russell 2000 index elements frequently change.
3. This investor is serious about managing his portfolio, and hes on the right track, though you have suggestions for fine-tuning his approach.
4. The investors portfolio is too heavily weighted in small-cap stocks. This problem is an allocation error driven by demand for excess returns.
Suppose youre a mutual fund investor, and you want to minimize expenses while maximizing the probability of achieving performance that exceeds the performance of most mutual funds. If you narrowed your alternatives to the following, which should you select?
1. Purchase an actively managed no-load fund that doesnt charge 12b-1 fees and that invests in small-cap stocks.
2. Purchase an index fund that mirrors the S&P 500.
3. Buy a WEBS tied to the Ireland stock market.
4. Buy the highest rated growth fund.
If you believe a stocks market value is about to drop, you could profit in the decline by _______ the stock.

A. assuming a long position in C. assuming a short position in B. assuming a bearish outlook on D. placing a market order in
One of the ways investors benefit from federal security laws is through

A. FDIC insurance, which protects investor principal. B. disclosures requiring that corporations reveal all information about the corporation. C. SIPC insurance, which protects market values from declining beyond a certain limit. D. disclosures and prohibitions that reduce the risk of stock price manipulation.
If you knew a bond would pay you $50 every year for 10 years and, at the end of the 10 years, youd also receive a $1,000 payment, how much should you pay to purchase the bond? Assume similar bonds yield 8 percent, and select the value closest to the correct answer.

A. Not more than $336 C. Not more than $733 B. Not more than $463 D. Not more than $799