BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
Investment Strategy -
correct answer ✅- A plan that examines potential returns
and rates investments according to desirability
- designed to help individual investors achieve their financial and
investment goals
Investment Philosophy -
correct answer ✅- a coherent way of thinking about
financial markets, how they work, and the types of mistakes that
you believe they make
- foundation of every IP is a view on human behavior
- one IP can have multiple investment strategies
U.S. large cap equities investors -
correct answer ✅-believe that markets are for the most part
efficient, but have periods and pockets of inefficiency
Examples of headwinds for U.S. equity market -
correct answer ✅- rising interest rates (compared to a year
ago)
- hawkish FED
- strong dollar (compared to a year ago)
,BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
Dual mandate of the FED -
correct answer ✅Full employment & 2% inflation target
What is the annual return of U.S. equities based on the 121 year
history in the Credit Suisse Yearbook (in nominal terms) -
correct answer ✅9.7%
many of the most successful active institutional investors view what
as opportunity? -
correct answer ✅Volatility
Smart Beta Funds -
correct answer ✅use a set of investment strategies that
emphasizes capturing investment factors or market inefficiencies in
a rules-based way
Nifty 50 investment strategy takeaway -
correct answer ✅buying fast growing companies regardless
of the price / valuation is not a sustainable long-term strategy for
outperformance
,BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
When investors gauge what should be considered a long-term
investing time horizon in stocks, a consideration is the longest
period of historic negative returns. Based on the data presented in
the Credit Suisse Yearbook and lecture slides, what was the longest
period that the U.S. equity market experienced a cumulative
negative real return? -
correct answer ✅16 years
What did the FED do on February 1st, 2023? What did they
forecast? -
correct answer ✅Raised the Fed Funds Rate by 25 bps (basis
points) and forecasted further rate increases (multiple) this year
explicit trading costs -
correct answer ✅the direct costs of trading, such as broker
commissions, fees, and taxes
Mental Models -
correct answer ✅can guide an individual's perception of the
world, but may limit the amount and type of information used
when making investment decisions
, BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
Factors likely to impact the FED needing to raise rates higher than
market expectations -
correct answer ✅- 2.5% rise in used car prices in January
- a decline in mortgage rates leading to an increase in demand in
the housing market
- January's payrolls report that showed the U.S. economy added
517,000 jobs and the unemployment rate fell to 3.4%
Are U.S. corporations moving away from offering defined benefit
retirement plans towards using defined contribution plans -
correct answer ✅Yes
Premortem -
correct answer ✅A strategy that imagines why a decision
failed and then works backward to determine the potential
obstacles and reasons that lead to a bad outcome. It can help the
investment process by determining the appropriate position size
and by reducing the emotional impact inherent in investing
writing a premortem prior to making an investment makes the
possibility of loss more noticeable
and Answers 2026
Investment Strategy -
correct answer ✅- A plan that examines potential returns
and rates investments according to desirability
- designed to help individual investors achieve their financial and
investment goals
Investment Philosophy -
correct answer ✅- a coherent way of thinking about
financial markets, how they work, and the types of mistakes that
you believe they make
- foundation of every IP is a view on human behavior
- one IP can have multiple investment strategies
U.S. large cap equities investors -
correct answer ✅-believe that markets are for the most part
efficient, but have periods and pockets of inefficiency
Examples of headwinds for U.S. equity market -
correct answer ✅- rising interest rates (compared to a year
ago)
- hawkish FED
- strong dollar (compared to a year ago)
,BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
Dual mandate of the FED -
correct answer ✅Full employment & 2% inflation target
What is the annual return of U.S. equities based on the 121 year
history in the Credit Suisse Yearbook (in nominal terms) -
correct answer ✅9.7%
many of the most successful active institutional investors view what
as opportunity? -
correct answer ✅Volatility
Smart Beta Funds -
correct answer ✅use a set of investment strategies that
emphasizes capturing investment factors or market inefficiencies in
a rules-based way
Nifty 50 investment strategy takeaway -
correct answer ✅buying fast growing companies regardless
of the price / valuation is not a sustainable long-term strategy for
outperformance
,BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
When investors gauge what should be considered a long-term
investing time horizon in stocks, a consideration is the longest
period of historic negative returns. Based on the data presented in
the Credit Suisse Yearbook and lecture slides, what was the longest
period that the U.S. equity market experienced a cumulative
negative real return? -
correct answer ✅16 years
What did the FED do on February 1st, 2023? What did they
forecast? -
correct answer ✅Raised the Fed Funds Rate by 25 bps (basis
points) and forecasted further rate increases (multiple) this year
explicit trading costs -
correct answer ✅the direct costs of trading, such as broker
commissions, fees, and taxes
Mental Models -
correct answer ✅can guide an individual's perception of the
world, but may limit the amount and type of information used
when making investment decisions
, BUSFIN 4225 Exam 1 Actual Questions
and Answers 2026
Factors likely to impact the FED needing to raise rates higher than
market expectations -
correct answer ✅- 2.5% rise in used car prices in January
- a decline in mortgage rates leading to an increase in demand in
the housing market
- January's payrolls report that showed the U.S. economy added
517,000 jobs and the unemployment rate fell to 3.4%
Are U.S. corporations moving away from offering defined benefit
retirement plans towards using defined contribution plans -
correct answer ✅Yes
Premortem -
correct answer ✅A strategy that imagines why a decision
failed and then works backward to determine the potential
obstacles and reasons that lead to a bad outcome. It can help the
investment process by determining the appropriate position size
and by reducing the emotional impact inherent in investing
writing a premortem prior to making an investment makes the
possibility of loss more noticeable
