To preserve capital in a declining share market, a portfolio manager should: a. Shift funds from cash markets into share markets. b. Buy call options on the share index. c. Sell put options on the share index. d. Buy share index futures. e. Sell share index futures.

Which of the following is a FALSE statement? a. The S&P500 is a popular benchmark for evaluating portfolio performance in the US. b. Dollar-weighted returns are appropriate for portfolio managers. c. Superior performance can result from superior skill in market timing. d. The higher the R2, the less the diversifiable risk. e. An average return of 1% over a period is not necessarily poor performance.

Modified duration is higher than Macaulays duration except for: a. zero-coupon bonds. b. discount bonds. c. premium bonds. d. bonds selling at par value. e. none of the above.

Which of the following is INCORRECT? a. Common stock represents ownership interest of corporations. b. Money market securities are highly liquid, low-risk short-term instruments. c. The buyer of an option has limited liability. d. Debt rated BBB and below is regarded as speculative. e. A common share is a capital market security.