FINA 3315 EXAM 2 MOCK EXAM WITH
ANSWER RATIONALES 2026
◉ in the real world, most of the assets available to investors.
Answer: Tend to be somewhat positively correlated.
◉ When an investor places a_ order he agrees to buy or sell at the
best available price when the trade is executed.
Answer: market
◉ the present value of $1000 discounted at the rate of 5% per year,
to be received at the end of 3 years is equal to.
Answer: $1,000/(1.05)^3
◉ Research indicates that investors who closely monitor their
portfolios and trade quickly in response to minor fluctuations in
price.
Answer: underperform those who hold investments for the long-
term and trade infrequently
◉ compound interest is interest paid not only on the initial
investment but also on any interest earned after the initial
investment..
,Answer: true
◉ the purchase of stock with cash in the hope of earning a capital
gain is known as taking a.
Answer: long position in the stock
◉ short- term securities are bought and sold in the.
Answer: money market
◉ the efficient frontier.
Answer: represents the best attainable tradeoff between risk and
return
◉ correlation is the measure of the relationship between two series
of numbers.
Answer: true
◉ historically, what is the correct ranking of the following securities
from lowest rate of return to the highest?.
Answer: short- term government bills, long-term government bonds,
stocks
, ◉ Which one of the following statements concerning the primary
market is correct?.
Answer: the first public sale of a company's stock is called an IPO
◉ One feature that mutual funds and exchange traded funds have in
common is.
Answer: They invest in broadly diversified porfortlios of securities
◉ liquidity risk is defined as the risk of.
Answer: not being able to sell an investment conveniently and at a
reasonable price.
◉ analysts commonly use the_ to measure market return..
Answer: the Standard & Poor's 500 index
◉ Charting is the technique of.
Answer: plotting the performance of a security over time.
◉ Two assets have a coefficient of correlation of -.4..
Answer: combining these assets will reduce risk
◉ Investments advisors are legally responsible for losses incurred
by their clients..
ANSWER RATIONALES 2026
◉ in the real world, most of the assets available to investors.
Answer: Tend to be somewhat positively correlated.
◉ When an investor places a_ order he agrees to buy or sell at the
best available price when the trade is executed.
Answer: market
◉ the present value of $1000 discounted at the rate of 5% per year,
to be received at the end of 3 years is equal to.
Answer: $1,000/(1.05)^3
◉ Research indicates that investors who closely monitor their
portfolios and trade quickly in response to minor fluctuations in
price.
Answer: underperform those who hold investments for the long-
term and trade infrequently
◉ compound interest is interest paid not only on the initial
investment but also on any interest earned after the initial
investment..
,Answer: true
◉ the purchase of stock with cash in the hope of earning a capital
gain is known as taking a.
Answer: long position in the stock
◉ short- term securities are bought and sold in the.
Answer: money market
◉ the efficient frontier.
Answer: represents the best attainable tradeoff between risk and
return
◉ correlation is the measure of the relationship between two series
of numbers.
Answer: true
◉ historically, what is the correct ranking of the following securities
from lowest rate of return to the highest?.
Answer: short- term government bills, long-term government bonds,
stocks
, ◉ Which one of the following statements concerning the primary
market is correct?.
Answer: the first public sale of a company's stock is called an IPO
◉ One feature that mutual funds and exchange traded funds have in
common is.
Answer: They invest in broadly diversified porfortlios of securities
◉ liquidity risk is defined as the risk of.
Answer: not being able to sell an investment conveniently and at a
reasonable price.
◉ analysts commonly use the_ to measure market return..
Answer: the Standard & Poor's 500 index
◉ Charting is the technique of.
Answer: plotting the performance of a security over time.
◉ Two assets have a coefficient of correlation of -.4..
Answer: combining these assets will reduce risk
◉ Investments advisors are legally responsible for losses incurred
by their clients..
