Question 1 (2.5 points)

A style portfolio manager offers two things:

Question 1 options:

a)	investment skill and market timing

b)	the specific style combined with a low beta

c)	a high beta and investment timing

d)	investment skill combined with the style

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Question 2 (2.5 points)

An exit fee (e.g., 3 percent) has the same impact on an investor's return as an equal load fee (e.g., 3 percent).

Question 2 options:

	a) True
	b) False

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Question 3 (2.5 points)

Mutual funds with beta coefficients greater than 1.0

Question 3 options:

a)	have outperformed the market

b)	have underperformed the market

c)	have more systematic risk than the market

d)	have less systematic risk than the market

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Question 4 (2.5 points)

No load mutual funds may increase fees through 1. sales charges 2. commissions 3. 12b-1 plans

Question 4 options:

a)

1 and 2

b)

1 and 3

c)

2 and 3

d)

only 3

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Question 5 (2.5 points)

Commercial paper is

Question 5 options:

a)	a short-term unsecured debt of a corporation

b)	a short-term secured debt of a corporation

c)	a long-term unsecured debt of a corporation

d)	a long-term secured debt of a corporation

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Question 6 (2.5 points)

The per share net asset value of a mutual fund depends on the difference between the fund's assets and liabilities and the number of shares outstanding.

Question 6 options:

	a) True
	b) False

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Question 7 (2.5 points)

Which of the following is a consideration when selecting a mutual fund? 1. portfolio turnover 2. 12b-1 fees 3. unrealized losses in the fund's portfolio

Question 7 options:

a)

1 and 2

b)

1 and 3

c)

2 and 3

d)	all of the above

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Question 8 (2.5 points)

In order to sell securities to the general public, a mutual fund must register its securities and prepare a prospectus detailing its objectives and costs to investors.

Question 8 options:

	a) True
	b) False

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Question 9 (2.5 points)

A Eurodollar CD is a certificate of deposit issued in the United States by a foreign bank.

Question 9 options:

	a) True
	b) False

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Question 10 (2.5 points)

If mutual funds make investments in efficient financial markets, they

Question 10 options:

a)	cannot outperform the market consistently

b)	should not outperform the market consistently

c)	will underperform the market when securities prices decline

d)	primarily bear unsystematic risk

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Question 11 (2.5 points)

If a closed-end investment company were liquidated, the investor should receive the net asset value minus the cost of the liquidation.

Question 11 options:

	a) True
	b) False

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Question 12 (2.5 points)

An equity REIT does not use financial leverage (i.e., its financing is entirely equity).

Question 12 options:

	a) True
	b) False

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Question 13 (2.5 points)

The shares of hedge funds are registered with the SEC.

Question 13 options:

	a) True
	b) False

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Question 14 (2.5 points)

If an investor believes that financial markets are inefficient, that argues for the individual to pursue a more active portfolio strategy and purchase exchange-traded funds instead of individual stocks.

Question 14 options:

	a) True
	b) False

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Question 15 (2.5 points)

The per share net asset value of the shares in a closed-end investment company depends on the difference between the fund's assets and liabilities and the number of shares outstanding.

Question 15 options:

	a) True
	b) False

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Question 16 (2.5 points)

The cash flow generated by REITs is taxed as income by the federal government.

Question 16 options:

	a) True
	b) False

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Question 17 (2.5 points)

Exchange-traded funds

Question 17 options:

a)	consistently outperform other funds

b)	mimic an index of securities

c)	require investors to select individual stocks

d)	are illustrations of load funds

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Question 18 (2.5 points)

A hedge fund

Question 18 options:

a)	is a public financial institution

b)	has its shares registered with the Federal Reserve

c)	is open to a select number of individual investors

d)	has actively traded shares

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Question 19 (2.5 points)

Distributions from an investment company may include earnings and capital gains.

Question 19 options:

	a) True
	b) False

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Question 20 (2.5 points)

A closed-end investment company