The volatility in returns associated with changes in market conditions is known as what type of risk.

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1. Diversifiable risk
2. Cyclical risk

C) Systematic risk

D) Natural risk

12. An investor is in the 24% marginal federal tax bracket receiving $200 in dividends from a Canadian corporation. How much federal tax must be paid on this income? The grossed-up factor is 38% and the dividend tax credit rate is 15.02%.

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1. $63.33
2. $39.17
3. $24.78
4. $48.00

13. Which of the following can be classified as a fiduciary relationship?

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A) The relationship between lawyer and client

B) The relationship between mother and child

C) Both (A) and (B)

D) Neither (A) nor (B)

14. Which of the following desirable characteristic should be included in a financial planning pyramid?

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A) Covering necessities

B) Accommodating small lifestyle changes

C) Not intimidating

D) All of the above

15. Which of the following statement best reflects the importance of the asset allocation decision to the investment process? The asset allocation decision

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A) Helps the investor decide on realistic investment goals

B) Identifies the specific securities to include in a portfolio

C) Determines most of the portfolios returns and volatility over time

D) Creates a standard by which to establish an appropriate investment time horizon

16. A stock has a beta of 0.9 and an expected return of 10%. The risk-free rate is 7% and the market is expected to return 11%. This stock is

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1. Underpriced
2. Overpriced
3. Properly priced
4. Cannot say

17. Allocations to alternatives are believed to increase a portfolios risk-adjusted return. Infrastructure investments serves as safe havens in times of crisis because they provide

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1. Inflation hedge
2. Stable growing income
3. Risk diversification
4. All of the above