Question 11(1 point)

An individual's investment policy must take into account the investor's objectives. True or false?

Question 11 options:

True

False

Question 12(1 point)

Which of the following assets wouldnotbe classified as cash according to the definitions used in the Welch textbook?

Question 12 options:

A)

municipal bonds

B)

certificates of deposit

C)

commercial paper

D)

Neither A nor C are considered to be cash assets

Question 13(1 point)

Correlation coefficients seem to be fairly stable, so it is reasonable to assume that these correlations will be similar in the future. True or false?

Question 13 options:

True

False

Question 14(1 point)

Selectivity, timing, and diversification are not important when forming the investment portfolio. True or false?

Question 14 options:

True

False

Question 15(1 point)

Rate of ReturnYear

28.7%20X1

10.87%20X2

4.91%20X3

15.8%20X4

5.49%20X5

Refer to the information above. Calculate the 5-year arithmetic average annual rate of return on the S&P 500 Index.

Question 15 options:

A)

13.15%

B)

12.83%

C)

10.84%

D)

none of the above

Question 16(1 point)

Today the word "hedge' currently is misapplied to hedge funds. True or false?

Question 16 options:

True

False

Question 17(1 point)

Direct investingis realized using financial intermediaries. True or false?

Question 17 options:

True

False

Question 18(1 point)

The investment management process includes all of the following:

1. Setting of investment policy.

2. Analysis and evaluation of investment vehicles.

3. Formation of diversified investment portfolio.

4. Portfolio revision

5. Measurement and evaluation of portfolio performance.

Question 18 options:

True

False

Question 19(1 point)

Which of the following assets are not included in the asset class, BONDS, according to the definitions used in this book?

Question 19 options:

A)

commercial paper

B)

municipal bonds

C)

long-term Treasury bonds

D)

All of the above are classified as bonds as defined by the chapter

Question 20(1 point)

Speculation is related with the short-term investment horizons and usually involves purchasing the salable securities with the hope that its price will increase rapidly, providing a quick profit. True or false?

Question 20 options:

True

False