AAMS Module 3 Test with Questions and Answers

AAMS Module 3 Test with Questions and Answers One implication of the Brinson study is that investors should: A) ignore market timing when managing portfolios. B) ignore market timing and securities selection when managing portfolios. C) ignore securities selection, and concentrate on asset allocation with less attention given to market timing. D) concentrate on asset allocation with less attention given to securities selection and market timing. ANSWER : D; concentrate on asset allocation with less attention given to securities selection and market timing A U.S. dollar-denominated instrument that is a CD issued by foreign branches of major American and foreign commercial banks is a: A) negotiable certificate of deposit. B) Yankee certificate of deposit. C) Eurodollar certificate of deposit. D) banker's acceptance. ANSWER : C; Eurodollar Certificate of Deposit The relative performance of different asset classes is dependent on the holding period selected. Based on historical performance data, which class of assets would be likely to provide the greatest pretax total return over the long term? A) small company stocks B) long-term (L-T) corporate bonds C) large company stocks D) long-term (L-T) government bonds ANSWER : A; Small Company Stocks