FIN 461 Exam -1 Questions With Correct Answers

FIN /




461 Exam #1 Questions With Correct Answers
/ // // // // // //




Investors //should //use //a //portfolio //approach //to: //- //CORRECT //ANSWERS(S)✔✔Reduce //risk



Which /
/of /


/the /


/following /


/is /


/the //best //reason //for //an //investor //to //be //concerned //with //the //composition //of //a //portfolio?




A. //Risk //reduction



B. //Downside //risk //protection



C. //Avoidance //of //investment //disasters //- //CORRECT //ANSWERS(S)✔✔Risk //reduction



With /
/respect /


/to //the //formation //of //portfolios, //which //of //the //following //statements //is //most //accurate?




A. //Portfolios //affect //risk //less //than //returns



B. //Portfolios //affect //risk //more //than //returns

, C. /
/Portfolios /


/affect /


/risk /


/and //returns //equally //- //CORRECT //ANSWERS(S)✔✔Portfolios //affect //risk //more //than //returns




Which /
/of //the //following //institutional //investors //will //most //likely //have //the //longest //time //horizon?




A. //Defined //benefit //plan



B. //University //endowment



C. //Life //insurance //company //- //CORRECT //ANSWERS(S)✔✔University //endowment



A //defined //benefit //plan //with //a //large //number //of //retirees //is //likely //have //a //high //need //for: //-
//CORRECT //ANSWERS(S)✔✔Income




Which /
/of /


/the /


/following //institutional //investors //is //most //likely //to //manage //investments //in //mutual //funds?




A. //Insurance //Companies



B. //Investment //Companies



C. //University //Endowments //- //CORRECT //ANSWERS(S)✔✔Investment //Companies