Question 1

When comparing investments with different horizons the ____________ provides the more accurate comparison.

Accepted Answer

A) arithmetic average 
B) effective annual rate 
C) average annual return 
D) historical annual average 
E) none of the above 
A) arithmetic average 
B) effective annual rate 
C) average annual return 
D) historical annual average 
E) none of the above

Question 2

Which of the following statement(s)is (are)true?
I.The real rate of interest is determined by the supply and demand for funds.
II.The real rate of interest is determined by the expected rate of inflation.
III.The real rate of interest can be affected by actions of the Fed.
IV.The real rate of interest is equal to the nominal interest rate plus the expected rate of inflation.

Accepted Answer

A) I and II only. 
B) I and III only. 
C) III and IV only. 
D) II and III only. 
E) I,II,III,and IV only. 
A) I and II only. 
B) I and III only. 
C) III and IV only. 
D) II and III only. 
E) I,II,III,and IV only.

Question 3

Annual Percentage Rates (APRs)are computed using

Accepted Answer

A) simple interest. 
B) compound interest. 
C) either A or B can be used. 
D) best estimates of expected real costs. 
E) none of the above. 
A) simple interest. 
B) compound interest. 
C) either A or B can be used. 
D) best estimates of expected real costs. 
E) none of the above.

Question 4

An investment provides a 1.25% return quarterly,its effective annual rate is

Accepted Answer

A) 5.23%. 
B) 5.09%. 
C) 4.02%. 
D) 4.04%. 
E) none of the above. 
A) 5.23%. 
B) 5.09%. 
C) 4.02%. 
D) 4.04%. 
E) none of the above.

Question 5

You purchase a share of Boeing stock for $90.One year later,after receiving a dividend of $3,you sell the stock for $92.What was your holding-period return?

Accepted Answer

A) 4.44% 
B) 2.22% 
C) 3.33% 
D) 5.56% 
E) none of the above 
A) 4.44% 
B) 2.22% 
C) 3.33% 
D) 5.56% 
E) none of the above

Question 6

Ceteris paribus,a decrease in the demand for loanable funds

Accepted Answer

A) drives the interest rate down. 
B) drives the interest rate up. 
C) might not have any effect on interest rates. 
D) results from an increase in business prospects and a decrease in the level of savings. 
E) none of the above. 
A) drives the interest rate down. 
B) drives the interest rate up. 
C) might not have any effect on interest rates. 
D) results from an increase in business prospects and a decrease in the level of savings. 
E) none of the above.

When comparing investments with different horizons the ____________ provides the more accurate comparison.

Annual Percentage Rates (APRs)are computed using

An investment provides a 1.25% return quarterly,its effective annual rate is

You purchase a share of Boeing stock for $90.One year later,after receiving a dividend of $3,you sell the stock for $92.What was your holding-period return?

Ceteris paribus,a decrease in the demand for loanable funds

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters

Exam 5: Introduction to Risk,return,and the Historical Record

When comparing investments with different horizons the ____________ provides the more accurate comparison.

Annual Percentage Rates (APRs)are computed using

An investment provides a 1.25% return quarterly,its effective annual rate is

You purchase a share of Boeing stock for $90.One year later,after receiving a dividend of $3,you sell the stock for $92.What was your holding-period return?

Ceteris paribus,a decrease in the demand for loanable funds

The Investment Environment

Asset Classes and Financial Instruments

How Securities are Traded

Mutual Funds and Other Investment Companies

Risk Aversion and Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, swaps, and Risk Management

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Portfolio Performance Evaluation

International Diversification

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the CFA Institute Appendices

Filters