True False

1. Securities trading is regulated by the SEC, other governmental agencies, and through self-regulation of the exchanges. The majority of the noteworthy SEC regulations have to do with insider fixed income (more specifically, mortgage) trading.

2. Algorithmic trading is the use of sophisticated computer programs to make trading decisions. AT seeks to exploit very short-term trends as new information about a firm becomes reflected in its stock price. Finally, AT trading is widely viewed as unethical by other professional investors.

3. Financial intermediaries pool saver funds and invest them. Investment and commercial banks are financial intermediaries while mutual fund companies, specifically money market mutual fund companies, are not. True False

4. The Information Ratio and the Sharpe Ratio are directly linked conceptually by the elements measured in their respective numerators and denominators. In short, both measure risk adjusted return.