AWMA Unit 4. Asset Allocation and
Selection EXAM QUESTIONS AND
VERIFIED CORRECT ANSWERS
GRADED A+ LATEST 100%
GUARANTEED PASS
This correct calculation is: (.6 × 8%) + (.4 × 1.25%) = 5.3%
Tactical asset allocation attempts to
Optimize the risk/return balance on long-term portfolios.
create efficient portfolios that provide the best balance risk and return over the long term.
move assets from those that appear overvalued to those that appear undervalued.
shift a portfolio's mix between a risky asset and a riskless asset. - CORRECT ANSWER-move
assets from those that appear overvalued to those that appear undervalued.
Tactical asset allocation uses securities selection and market timing techniques to shift assets
from those perceived to be overvalued to those that are perceived to be undervalued.
Which one of the following is a unique risk associated with international bonds?
, interest rate risk
currency risk
call risk
purchasing power risk - CORRECT ANSWER-currency risk
Currency risk is unique to international bonds (and stock) because of the possibility of some loss
in converting a foreign currency into U.S. dollars.
Using the growth-oriented intrinsic model, if earnings per share are $1.20, the company's
growth rate is 5%, and the AAA bond rate is 6%, what is the stock's value?
$16.30
$17.25
$21.67
$46.30 - CORRECT ANSWER-$16.30
The value = $1.20 × [(37.5 + 8.8(5))/6)] = $1.20 × 13.58 = $16.30. (To calculate the 13.58, take
8.8 times 5 = 44, then add 37.5, which equals 81.5, then divide by 6, which equals13.58.)
A mutual fund sales load that is assessed on a descending scale if the fund is sold within the first
five or six years of purchase is called a
Selection EXAM QUESTIONS AND
VERIFIED CORRECT ANSWERS
GRADED A+ LATEST 100%
GUARANTEED PASS
This correct calculation is: (.6 × 8%) + (.4 × 1.25%) = 5.3%
Tactical asset allocation attempts to
Optimize the risk/return balance on long-term portfolios.
create efficient portfolios that provide the best balance risk and return over the long term.
move assets from those that appear overvalued to those that appear undervalued.
shift a portfolio's mix between a risky asset and a riskless asset. - CORRECT ANSWER-move
assets from those that appear overvalued to those that appear undervalued.
Tactical asset allocation uses securities selection and market timing techniques to shift assets
from those perceived to be overvalued to those that are perceived to be undervalued.
Which one of the following is a unique risk associated with international bonds?
, interest rate risk
currency risk
call risk
purchasing power risk - CORRECT ANSWER-currency risk
Currency risk is unique to international bonds (and stock) because of the possibility of some loss
in converting a foreign currency into U.S. dollars.
Using the growth-oriented intrinsic model, if earnings per share are $1.20, the company's
growth rate is 5%, and the AAA bond rate is 6%, what is the stock's value?
$16.30
$17.25
$21.67
$46.30 - CORRECT ANSWER-$16.30
The value = $1.20 × [(37.5 + 8.8(5))/6)] = $1.20 × 13.58 = $16.30. (To calculate the 13.58, take
8.8 times 5 = 44, then add 37.5, which equals 81.5, then divide by 6, which equals13.58.)
A mutual fund sales load that is assessed on a descending scale if the fund is sold within the first
five or six years of purchase is called a
