A6: Which of the above statement on the efficient frontier is true? (A) Moving up the frontier, the holding on the riskier asset is increased (B) Moving up the frontier, the holding on the riskier asset is decreased (C) Points outside the frontier is not efficient (D) Points inside the frontier is efficient and preferred (E) The more the frontier leans towards the left in the return-risk axes, the more efficient it is A7: Which of the following statement is true. (A) The composition of the T1 portfolio changes as risk free borrowing rate changes (B) The composition of the T1 portfolio changes as risk free lending rate changes (C) The composition of the T1 portfolio changes as the amount of borrowing changes (D) The composition of the T1 portfolio changes as the amount of lending changes (E) T2 portfolio is riskier than T1 portfolio A8: Which of the following statement is correct? (A) Returns earned from cash accounts are always higher than returns from margin accounts (B) Only positive returns from cash accounts are higher than positive returns from margin accounts (C) Only negative returns from cash accounts are higher than negative returns from margin accounts (D) Higher or lower returns are not related to whether accounts are cash or margin accounts (E) None of the above statement is correct A9: A currency quotation of US$1 to RMB6.55 is (A) both a direct quotation in USA and China (B) both an indirect quotation in USA and China (C) a direct quotation in USA and an indirect quotation in China (D) a direct quotation in China and an indirect quotation in USA (E) is sometimes a direct quotation and sometimes an indirect quotation in USA A10: Orange juice makers would choose which of the following hedging strategies (A) long futures on oranges (B) short futures on oranges (C) short spot on oranges (D) long spot on oranges (E) None of the above A11: give the holder the right but not the obligation to sell the und asset at any time up until maturity date. (A) Short futures (B) American calls (C) American puts (D) European calls (E) European puts A12: A hedger enters the derivatives market to (A) carn profit (B) earn maximum returns (D) trade call options (E) trade put options (C) reduce risks