1. Which of the following portfolio construction methods starts with asset allocation?

   		Asset allocation
   		Buy and hold
   		Bottom-up
   		Top-down
   		Middle-out

2. AGG is an ETF that tracks the returns of the Barclays U.S. Aggregate Bond Index. If the return on the Barclays U.S. Aggregate Bond Index is -3% at the market close, what is the return on AGG today?

   		3%
   		6%
   		0.3%
   		-6%
   		-3%

3. Treasury Inflation-Protected Securities (TIPS)

   		pay a variable interest rate that is indexed to inflation but maintain a constant principal.
   		pay a fixed interest rate for life.
   		provide a constant stream of income in real (inflation-adjusted) dollars.
   		provide a constant stream of income in real (inflation-adjusted) dollars and have their principal adjusted in proportion to the Consumer Price Index.
   		have their principal adjusted in proportion to the Consumer Price Index.

4. T-bills are financial instruments initially sold by ________ to raise funds.

   		the U.S. government and agencies of the federal government
   		agencies of the federal government
   		the U.S. government
   		state and local governments
   		commercial banks

5. ________ are financial assets.

   		Stocks
   		Machines
   		Bonds and stocks
   		Bonds
   		Bonds, machines, and stocks