Question 301.78 pts

What necessitates computing a time weighted rate of return in a portfolio?

Group of answer choices

Cash flows in and out of a portfolio

The arithmetic return is inaccurate if there is negative

The portfolio is positively correlated to the overall stock market

Because there might be multiple years involved

Flag question: Question 31

Question 311.78 pts

Your client is questioning the return on his/her portfolio. Use this data to compute the average annual return: the portfolio starts with $500,000. 4 months later it is worth $550,000. The client then adds $50,000. 8 months later the portfolio is worth $625,000. The client then adds $225,000. 6 months later the portfolio is worth $800,000. The client then takes out $100,000. 6 months later the portfolio is worth $800,000. What is the average annual return of the portfolio?

Group of answer choices

160%

60%

12.47%

23.25%

11.02%

Flag question: Question 32

Question 321.78 pts

Economists think there is a 50% chance the economy will grow 2% next year. If this happens, analysts believe the stock market will rise 7% next year. But, if the economy is stronger than expected, say a 4% growth rate, which economists believe there is a 15% chance of, the stock market would probably rise 15% next year. Lastly, economists believe there is a 35% chance the economy will fall into a recession next year, contracting by 1%. If this happens, the stock market will likely decline by 12%. What is the expected return for the stock market next year?

Group of answer choices

11.33%

3.33%

1.67%

1.55%

7.0%

Flag question: Question 33

Question 331.78 pts

What is performance attribution?

Group of answer choices

a % return

calculating a % return

determining how a return was generated

determining the affect the overall market had on a return

Flag question: Question 34

Question 341.78 pts

What is the primary goal of an investment adviser/manager?

Group of answer choices

generate an attractive rate of return

minimize risk

create a portfolio that reflects the return and the risk needs of each client

communicate to clients what their return and risk needs should be

Flag question: Question 35

Question 351.78 pts

How do you diversify a portfolio?

Group of answer choices

use a lot of investments

combine several different kinds of investments

focus on attractive investments

buy investments that generate high dividends

Flag question: Question 36

Question 361.78 pts

4 major types of entities issue bonds. Which one is not one?

Group of answer choices

Federal Govt

Charitable entities

Corporate entities

State Govt

Federal Agencies

Flag question: Question 37

Question 371.78 pts

Which of the following is not a reason why people invest in international securities?

Group of answer choices

higher returns

different return patterns

different economic policies

lower investment fees

superior risk-adjusted returns

Flag question: Question 38

Question 381.78 pts

Which of the following is not a way people typically invest in international securities?

Group of answer choices

ADRs

Margin

Mutual funds

Direct

Flag question: Question 39

Question 391.78 pts

If you want to profit because you think a stock will go down in price, what should you do?

Group of answer choices

Buy a put option

Buy a call option