Question 1

An indexed fund tracks the sharemarket, giving the same return as the chosen share price index.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following is an appropriate industry benchmark?

Accepted Answer

A)  MSCI World Index. 
B)  UBS Bank Bill Index. 
C)  UBS Composite Bond Index. 
D)  All of the above. 
A)  MSCI World Index. 
B)  UBS Bank Bill Index. 
C)  UBS Composite Bond Index. 
D)  All of the above.

Question 3

A low price- earnings ratio on an asset would indicate that the asset is:

Accepted Answer

A)  overvalued. 
B)  undervalued. 
C)  indexed. 
D)  not indexed. 
A)  overvalued. 
B)  undervalued. 
C)  indexed. 
D)  not indexed.

Question 4

Indexed funds are actively managed funds which simply strive to outperform a benchmark.

Accepted Answer

A) True 
 B)False

Question 5

If Rp = fund return, Rf = the risk- free return, Rm = the market return, and Bp = the beta of the fund, then the fund's alpha statistic is defined as Rm - Bp(Rf - Rp).

Accepted Answer

A) True 
 B)False

Question 6

With a managed investment fund, investors can:

Accepted Answer

A)  avoid the principal- agent problem. 
B)  hold a larger number of assets than would be possible with direct investment. 
C)  pay zero tax. 
D)  obtain direct ownership of shares or property. 
A)  avoid the principal- agent problem. 
B)  hold a larger number of assets than would be possible with direct investment. 
C)  pay zero tax. 
D)  obtain direct ownership of shares or property.

Question 7

To measure the performance of a fund, we commonly compare it with a comparable market benchmark. The most suitable benchmark for evaluating an Australian equity management fund is the____________ index.

Accepted Answer

A)  SBC 90- day bank bill 
B)  Morgan Stanley World 
C)  ASX 200 
D)  Commonwealth bond 
A)  SBC 90- day bank bill 
B)  Morgan Stanley World 
C)  ASX 200 
D)  Commonwealth bond

Question 8

When equity trusts invest in overseas shares, the investor will be automatically protected from any foreign currency exposure.

Accepted Answer

A) True 
 B)False

Question 9

A suitable measure of Rf, the risk- free rate, is the yield on a Commonwealth Government bond.

Accepted Answer

A) True 
 B)False

An indexed fund tracks the sharemarket, giving the same return as the chosen share price index.

Which of the following is an appropriate industry benchmark?

A low price- earnings ratio on an asset would indicate that the asset is:

Indexed funds are actively managed funds which simply strive to outperform a benchmark.

If Rp = fund return, Rf = the risk- free return, Rm = the market return, and Bp = the beta of the fund, then the fund's alpha statistic is defined as Rm - Bp(Rf - Rp).

With a managed investment fund, investors can:

To measure the performance of a fund, we commonly compare it with a comparable market benchmark. The most suitable benchmark for evaluating an Australian equity management fund is the____________ index.

When equity trusts invest in overseas shares, the investor will be automatically protected from any foreign currency exposure.

A suitable measure of Rf, the risk- free rate, is the yield on a Commonwealth Government bond.

Financial Markets

Debt Securities and Markets

Introduction to Financial Calculations

Banks and Other Deposit Taking Institutions

The Payments System

Interest Rates, the Yield Curve and Monetary Policy

The Foreign Exchange Market

Listed Securities

Fixed Rate Derivatives

Options

Global Financial Crisis

Managing Foreign Exchange Risk

Managing Interest Rate Risk

Filters

Exam 6: Managed and Superannuation Funds

An indexed fund tracks the sharemarket, giving the same return as the chosen share price index.

Which of the following is an appropriate industry benchmark?

A low price- earnings ratio on an asset would indicate that the asset is:

Indexed funds are actively managed funds which simply strive to outperform a benchmark.

If Rp = fund return, Rf = the risk- free return, Rm = the market return, and Bp = the beta of the fund, then the fund's alpha statistic is defined as Rm - Bp(Rf - Rp).

With a managed investment fund, investors can:

To measure the performance of a fund, we commonly compare it with a comparable market benchmark. The most suitable benchmark for evaluating an Australian equity management fund is the____________ index.

When equity trusts invest in overseas shares, the investor will be automatically protected from any foreign currency exposure.

A suitable measure of Rf, the risk- free rate, is the yield on a Commonwealth Government bond.

Financial Markets

Debt Securities and Markets

Introduction to Financial Calculations

Banks and Other Deposit Taking Institutions

The Payments System

Interest Rates, the Yield Curve and Monetary Policy

The Foreign Exchange Market

Listed Securities

Fixed Rate Derivatives

Options

Global Financial Crisis

Managing Foreign Exchange Risk

Managing Interest Rate Risk

Filters