单选

Which of the following risk premiums is most relevant in explaining the difference in yields between 30-year bonds issued by the US Treasury and 30-year bonds issued by a small, private US corporate issuer?

单选

If the price of a stock goes from $15.00 to $16.20 in one year, the continuously compounded rate of return is closest to:

单选

A fund receives investments at the beginning of each year and generates returns for three years as follows: Exhibit 1:Investments and Returns for Three Years Which return measure over the three-year period is negative?

单选

An investor is evaluating the returns of three recently formed ETFs. Selected return information on the ETFs is presented in Exhibit 1: Exhibit 1:Returns on ETFs Which ETF has the highest annualized rate of return?

单选

The price of a stock at t = 0 is USD208.25 and at t = 1 is USD186.75. The continuously compounded rate of return, r1,T for the stock from t = 0 to t = 1 Is closest to:

单选

The quarterly returns on a portfolio are as follows: The time-weighted rate of return of the portfolio is closest to:

单选

Consider the investment in the following table:

单选

The strategy of using leverage to enhance investment returns:

单选

At the beginning of the year, an investor holds EUR10,000 in a hedge fund. The investor borrowed 25 percent of the purchase price, EUR2,500, at an annual interest rate of 6 percent and expects to pay a 30 percent tax on the return she earns from his investment. At the end of the year, the hedge fund reported the information in Exhibit 22: Exhibit 1:Hedge Fund Investment The investor's after-tax return on the hedge fund investment is closest to:

单选

The 15-month holding period return for a security is 12%. Its annualized return is closest to:

单选

A portfolio provides the following returns over a five-year period. The average compound rate of return of the portfolio across the five-year period is closest to:

单选

A consumer purchases an automobile using a loan. The amount borrowed is €30,000, and the terms of the loan call for the loan to be repaid over five years using equal monthly payments with an annual nominal interest rate of 8% and monthly compounding. The monthly payment is closest to:

单选

A financial contract offers to pay €1,200 per month for five years with the first payment made immediately. Assuming an annual discount rate of 6.5%, compounded monthly, the present value of the contract is closest to:

单选

Suppose Mylandia announces that it expects significant cash flow growth over the next three years, and now plans to increase its recent CAD2.40 dividend by 10 percent in each of the next three years. Following the 10 percent growth period, Mylandia is expected to grow its annual dividend by a constant 3 percent indefinitely. Mylandia's required return is 8 percent. Based upon these revised expectations, The expected share price of Mylandia stock is:

单选

An analyst observes the benchmark Indian NIFTY 50 stock index trading at a Forward price-to-earnings ratio of 15. The index's expected dividend payout ratio in the next year is 50 percent, and the index's required return is 7.50 percent. If the analyst believes that the NIFTY 50 index dividends will grow at a constant rate of 4.50 percent in the future, which of the following statements is correct?

单选

If you require an 8 percent return and must invest USD500,000, which of the investment opportunities in Exhibit 1 should you prefer? Exhibit 1:Investment Opportunities

单选

The current exchange rate between the euro and US dollar is USD/EUR1.025. Risk-free interest rates for one year are 0.75 percent for the euro and 3.25 percent for the US dollar. The one-year USD/EUR forward rate that best prevents arbitrage Opportunities is:

单选

Consider the results of an analysis focusing on the market capitalizations of a sample of 100 firms: Exhibit 1:Market Capitalization of a Sample of 100 Firms The interquartile range is closest to:

单选

For a set of return observations, the coefficient of variation is best described as a Measure of:

单选

A fund had the following experience over the past 10 years: Exhibit 1:Performance over 10 Years The target semideviation of the returns over the 10 years, if the target is 2 percent, Is closest to:

单选

Consider the mean monthly return and the standard deviation for three industry sectors, as shown in Exhibit 2: Exhibit 2:Mean Monthly Return and Standard Deviations Based on the coefficient of variation (CV), the riskiest sector is:

单选

An analyst developed two scenarios with respect to the recovery of USD100,000 principal from defaulted loans: The amount of the expected recovery is closest to which of the following?

单选

The probability distribution for a company's sales is: The standard deviation of sales is closest to which of the following?

单选

An analyst produces the following joint probability function for a foreign index (FI) and a domestic index (DI). The covariance of returns on the foreign index and the returns on the domestic index Is closest to:

单选

An investor wants to maximize the possibility of earning at least 5% on her investments each year. Using Roy's safety-first criterion, the most appropriate choice for the investor is Portfolio:

单选

In contrast to normal distributions, lognormal distributions:

单选

Analysts performing bootstrap:

单选

A population has a non-normal distribution with mean µ and variance σ2. The sampling distribution of the sample mean computed from samples of large size from that population will have:

单选

A sample mean is computed from a population with a variance of 2.45. The sample size is 40. The standard error of the sample mean is closest to:

单选

The sampling error is best described as the:

单选

An analyst suspects that, in the most recent year, excess returns on stocks have fallen below 5%. She wants to study whether the excess returns are less than 5%. Designating the population mean as μ, which hypotheses are most appropriate for her analysis?

单选

Which of the following statements about hypothesis testing is correct?

单选

A parametric test is most likely preferred to a non-parametric test when:

单选

A small-cap growth fund's monthly returns for the past 36 months have been consistently outperforming its benchmark. An analyst is determining whether the standard deviation of monthly returns is greater than 6%. Which of the following best describes the hypothesis to be tested?

单选

A Type II error is best described as:

单选

Samples of size (n1,n2) are drawn respectively from two populations (X1,X2) with Associated population means and standard deviations of (μ1,μ2) and (σ1,σ2) where σ1 ≠ σ2. In addition, d is the sample mean of X1−X2 with a standard error of s d and a population mean of μd0 and s2p is a pooled estimator of the common variance. The most appropriate test statistic to determine the equality of the two population means assuming X1 and X2 are independent and normally distributed is:

单选

The probability of correctly rejecting the null hypothesis is the:

单选

A pooled estimator is used when testing a hypothesis concerning the:

单选

Which of the following tests should be used to test the difference between the variances of two normally distributed populations with random independent samples?

单选

In which of the following situations would a nonparametric test of a hypothesis most likely be used?

单选

With respect to simple linear regression, a residual is best described as the difference between the observed value of a dependent variable and:

单选

A characteristic of Big Data is that:

单选

An analyst creating a dataset composed largely of product reviews would most likely classify the data sources as generated by:

单选

The computerized buying and selling of financial instruments, in accordance with pre-specified rules and guidelines, is best described as:

单选

An analyst tabulates the ranks of four paired observations of random variables X and Y as follows: The Spearman rank correlation coefficient between X and Y is closest to:

单选

Which of the following is an underlying assumption of the simple linear regression model? The regression residuals:

单选

With respect to Big Data, which of the following is most likely classified as alternative data?

单选

An investment requires 10 equal annual payments, starting today, and will pay out a lump sum of $500,000 15 years from today. If the interest rate is 4% per year compounded annually, the required annual payment is closest to:

单选

In a parametric test of the correlation between two variables with a sample size of 51 and sample correlation of 0.6, the t-statistic is closest to:

单选

The lognormal distribution:

单选

An analyst performs a hypothesis test concerning the difference between the mean returns of two portfolios, assuming normally distributed populations with unknown but equal variances. If the analyst decides to change the hypothesized difference in mean returns from 0% to 1%, which of the following will change?

单选

Which of the following is required to compute the standard error of a sample mean using the bootstrap resampling method?

单选

An analyst runs a simple linear regression to test whether the variation in the demand for corn explains the variation in the supply of wheat. In this model, the supply of wheat is a(n):

单选

A test of independence is based on the data in a contingency table with 5 rows and 4 columns. Using a nonparametric test statistic that is chi-square distributed, the number of degrees of freedom is:

单选

An equally weighted portfolio consists of two securities, each with a standard deviation of 3%. If the two securities' returns are uncorrelated, the portfolio's standard deviation is closest to:

单选

An investor invests a fixed amount of money into a fund each year for three years as follows: The investor's average cost per share is closest to:

单选

An investor purchased a stock for $450 and then sold the stock immediately after receiving a dividend of $2. If the holding period return is a loss of 10.2%, the investor sold the stock at a price closest to:

单选

The central limit theorem:

单选

An analyst considers the population of all existing stocks and selects those where the company name starts with the letter P. This sampling procedure is most likely an example of:

单选

For a continuous positively skewed unimodal distribution:

单选

The simple linear regression model in which only the independent variable is in logarithmic form is best described as the:

单选

An investor summarizes end-of-year cash outlays and proceeds from a two-year investment in a company's shares below:

单选

Using a discount rate of 5%, compounded monthly, the present value (PV) of $5,000 to be received three years from today is closest to:

单选

Consider the following annual return for Fund Y over the past five years: Exhibit 1:Five-Year Annual Returns Year Return (%) The geometric mean return for Fund Y is closest to:

单选

Assume the following: The real risk-free rate of return is 3%. The expected inflation premium is 5%. The market-determined interest rate of a security is 12%. Q.The sum of the default risk premium, liquidity premium, and maturity premium for the security is closest to:

单选

An investor is considering buying a US T-bill. If the real risk-free rate is 1% and the inflation premium is 2%, the investor's opportunity cost of failing to make this Investment is closest to:

单选

An investor purchases one share of stock for $85. Exactly one year later, the company pays a dividend of $2.00 per share. This is followed by two more annual dividends of $2.25 and $2.75 in successive years. Upon receiving the third dividend, the investor sells the share for $100. The money-weighted rate of return on this investment is closest to:

单选

A USD25 million equity portfolio is financed 20 percent with debt at a cost of 6 percent annual cost. If that equity portfolio generates a 10 percent annual total investment return, then the leveraged return is:

单选

If a client controls the timing of cash flows into and out of a portfolio, which of the following is most appropriate when evaluating the performance of the portfolio manager?

单选

The annualized return for an investor who has achieved a return of 5% over a six-week period is closest to:

单选

An investment in 10,000 common shares of a company for one year earned a 15.5% return. The investor received a $2,500 dividend just prior to the sale of the shares at $24 per share. The price that the investor paid for each share one year earlier Was closest to:

单选

The return measure that best allows one to compare asset returns earned over different length time periods is the:

单选

Grupo Ignacia issued 10-year corporate bonds two years ago. The bonds pay an annualized coupon of 10.7 percent on a semiannual basis, and the current annualized YTM is 11.6 percent. The current price of Grupo Ignacia's bonds (per MXN100 of par Value) is closest to:

单选

A consultant starts a project today that will last for three years. Her compensation package includes the following: If she expects to invest these amounts at an annual interest rate of 3%, compounded annually until her retirement 10 years from now, the value at the end of 10 years is closest to:

单选

Grey Pebble Real Estate seeks a fully amortizing fixed-rate five-year mortgage loan to finance 75 percent of the purchase price of a residential building that costs NZD5 million. The annual mortgage rate is 4.8 percent. The monthly payment for this Mortgage would be closest to:

单选

An annuity makes seven annual payments of $10,000 each, with the first payment occurring five years from today. If the discount rate is 6% per year, the value of the annuity today is closest to:

单选

Mylandia Corporation stock trades at CAD60.00. The company pays an annual dividend to its shareholders, and its most recent payment of CAD2.40 occurred yesterday. Analysts following Mylandia expect the company's dividend to grow at a constant rate of 3 percent per year. Mylandia's required return is:

单选

Italian one-year government debt has an interest rate of 0.73 percent; Italian two-year government debt has an interest rate of 1.29 percent. The breakeven one-year reinvestment rate, one year from now is closest to:

单选

A portfolio manager would like to calculate the compound rate of return on an Investment. Which of the following mean returns will he most likely use?

单选

Which of the following statements is most accurate? The first quintile generally exceeds the:

单选

Exhibit 1 shows the annual MSCI World Index total returns for a 10-year period. Exhibit 1:MSCI World Index Returns The fourth quintile return for the MSCI World Index is closest to:

单选

For a positively skewed unimodal distribution, which of the following measures is most accurately described as the largest?

单选

Equity return distributions are best described as being:

单选

An analyst has established the following prior probabilities regarding a company's next quarter's earnings per share (EPS) exceeding, equaling, or being below the consensus estimate. Several days before releasing its earnings statement, the company announces a cut in its dividend. Given this new information, the analyst revises his opinion regarding the likelihood that the company will have EPS below the consensus estimate. He estimates the likelihood the company will cut the dividend, given that EPS exceeds/meets/falls below consensus, as reported below. The analyst thus determines that the unconditional probability for a cut in the dividend, P(Cut div), is equal to 23.75%. Using Bayes’ formula, the updated (posterior) probability that the company’s EPS are below the consensus is closest to:

单选

An investor in Abco stock forecasts the probability that Abco exceeded, met, or fell short of consensus expectations for free cash flow (FCF) during the prior quarter: P(FCF exceeded consensus) = 0.50 P(FCF met consensus) = 0.35 P(FCF fell short of consensus) = 0.15 While waiting for Abco to release last quarter's FCF data, the investor learns that Abco will acquire a competitor. Believing that the upcoming acquisition makes it more likely that last quarter's FCF will exceed the consensus, the investor generates a list of FCF events that may have influenced the acquisition: P(Acquisition | FCF exceeded consensus) = 0.40 P(Acquisition | FCF met consensus) = 0.25 P(Acquisition | FCF fell short of consensus) = 0.35 Using Bayes' Formula, calculate the probability that Abco is likely to exceed consensus FCF expectations for last quarter given the acquisition. P(FCF exceeded consensus | Acquisition) is closest to:

单选

The joint probability of returns for securities A and B are as follows: Joint Probability Function of Security A and Security B Returns (Entries Are Joint Probabilities) The covariance of the returns between Securities A and B is closest to:

单选

An investor currently has a portfolio valued at $700,000. The investor’s objective is long-term growth, but she will need $30,000 by the end of the year to pay her son’s college tuition and another $10,000 by year-end for her annual vacation. The investor is considering three alternative portfolios: Using Roy's safety-first criterion, which of the alternative portfolios most likely minimizes the probability that the investor's portfolio will have a value lower Than $700,000 at year-end?

单选

The lognormal distribution is a more accurate model for the distribution of stock prices than the normal distribution because stock prices are:

单选

Which one of the following statements is true about non-probability sampling?

单选

The best approach for creating a stratified random sample of a population involves:

单选

The distribution of all the distinct possible values for a statistic when calculated from samples of the same size randomly drawn from the same population Is most accurately referred to as:

单选

A mutual fund manager wants to create a fund based on a high-grade corporate bond index. She first distinguishes between utility bonds and industrial bonds; she then, for each segment, defines maturity intervals of less than 5 years, 5 to 10 years, and greater than 10 years. For each segment and maturity level, she classifies the bonds as callable or noncallable. She then randomly selects bonds from each of the subpopulations she has created. For the manager's sample, which of the following best describes the sampling approach?

单选

Which of the following is most likely to be an explanation of the power of a test? The power of a test is the probability of:

单选

Given a large random sample, which of the following types of data are least appropriately analyzed with nonparametric tests?

单选

If a researcher selects a 5 percent level of significance for a hypothesis test, the confidence level is:

单选

The value of a test statistic is best described as the basis for deciding whether to:

单选

An analyst collects the following data related to paired observations for Sample A and Sample -B. Assume that both samples are dependent and are drawn from normally distributed populations and that the population variances are not known. The t-statistic to test the hypothesis that the mean difference is equal to zero Is closest to:

单选

The level of significance of a hypothesis test is best used to:

单选

The power of a hypothesis test is:

单选

In the step “stating a decision rule” in testing a hypothesis, which of the following elements must be specified?