Which index or fund is equal-weighted?

None of these indexes are equal-weighted

a. SPW

b. DJI

c. QQQ

d. SPX

e. All of these indexes are equal-weighted

2. Of the investments listed below, which security is generally expected to provide the highest projected level of return over the long term (ex-ante)?

a. 20 year AAA rated Corporate Note

b. 30 year US Treasury Bond

c. 5 year Bank CD

d. Small Cap Stocks

3. The Equity Risk Premium is

a. the expected return of a stock less the risk free rate.

b. always positive.

c. never positive.

d. the risk-free rate less the expected return of a stock

4. The maximum loss of a long call position is

unlimited.

the stock's current value

zero.

O equal to the premium paid.

6. Rank the following based on their potential reward for the investor (highest to lowest potential reward):

a. Senior Debt

Subordinate Debt

Preferred

Common Equity

7. Which statement is the most correct regarding investment returns and their level of risk?

a. Riskier investments generally have the lower expected returns (ex-ante) than risk-less alternatives.

b. Higher risk investments may provide lower actual levels of return (ex-post) than risk free investments over the short- or long-term.

c. Investors should invest in risk-free assets when they want to earn the highest projected ex-ante returns over O the long-run

d. Compared to lower risk alternatives, higher risk Investments always provided higher levels of return (ex-post over the short term.

e. All of these answers are correct.

f. A risk-free investment never has the highest actual return ex-post

8. The maximum gain of a long call position is

a. $1,000

b. zero

c. equal to the premium paid.

d. unlimited.

9. Many market pundits say an inverted yield curve is

a. A trigger for a bull market is about to begin.

b. a sign of future inflation.

c. a signal that the risk of a recession is growing more likely.

d. a signal that rate hikes are likely coming.

10. Stagflation is

a. a combination of high inflation and low or negative economic growth that (like disco) sucks and should stay in the 1970s.

b. the combination of low unemployment and low prices.

c. a combination of high interest rates and low inflation.

d. the combination of high wages and low prices