Which one of the following approaches to asset allocation tries to identify the asset
mix that provides an optimal balance of risk and return for a long investment horizon?
A) dynamic asset allocation
B) strategic asset allocation
C) tactical asset allocation
Give this one a try later!
Answer: B; strategic asset allocation
The principal of a treasury inflation protected security (TIPS) is tied to:
A) CPI
B) PPI
C) LIBOR
D) Fed Discount Rate
Give this one a try later!
, Answer: A; CPI
If a stock pays a dividend of $1.60 per share, the growth rate of that dividend is 6%,
and the required return is 10%, what is the intrinsic value of the stock according to the
dividend discount model?
A) $16.96
B) $28.27
C) $40.00
D) $42.40
Give this one a try later!
Answer: D; $42.40
(1.60 X 1.06) / (.10 - .06) = 1.696 / .04 = $42.40
One assumption of technical analysis is that:
A) Stock prices move randomly
B) Markets are efficient
C) Ratio analysis leads to better stock selection
D) Stock prices move in trends
Give this one a try later!
Answer: D; stock prices move in trends
Which one of the following is a unique risk associated with international bonds?
A) interest rate risk
B) currency risk
mix that provides an optimal balance of risk and return for a long investment horizon?
A) dynamic asset allocation
B) strategic asset allocation
C) tactical asset allocation
Give this one a try later!
Answer: B; strategic asset allocation
The principal of a treasury inflation protected security (TIPS) is tied to:
A) CPI
B) PPI
C) LIBOR
D) Fed Discount Rate
Give this one a try later!
, Answer: A; CPI
If a stock pays a dividend of $1.60 per share, the growth rate of that dividend is 6%,
and the required return is 10%, what is the intrinsic value of the stock according to the
dividend discount model?
A) $16.96
B) $28.27
C) $40.00
D) $42.40
Give this one a try later!
Answer: D; $42.40
(1.60 X 1.06) / (.10 - .06) = 1.696 / .04 = $42.40
One assumption of technical analysis is that:
A) Stock prices move randomly
B) Markets are efficient
C) Ratio analysis leads to better stock selection
D) Stock prices move in trends
Give this one a try later!
Answer: D; stock prices move in trends
Which one of the following is a unique risk associated with international bonds?
A) interest rate risk
B) currency risk
