FINA 3315 Exam 1 2025 Questions and Answers 100% Pass

FINA 3315 Exam 1 2025 Questions and Answers 100% Pass Which of the following statements is (are) correct concerning hedge funds? I. They are highly regulated. II. They hedge all positions to limit risks. III. Management and other fees are extremely low compared to other types of funds. IV. Access is limited to institutions and high net worth or high income individuals. - IV only True or False: Most bonds pay interest quarterly. - False A cyclical company tends to: Have less volatile earnings than the overall market Have earnings that track the overall economy Have a high price-to-earnings ratio - Have earnings that track the overall economy True or False: In an inflationary environment, the interest payments on Treasury inflation - indexed obligations increase over time. - True 2COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED Investors who buy mutual funds that have had large gains over the last few years are exhibiting a tendency known as Overconfidence Representativeness Loss aversion Narrow framing - Representativeness The bond market is considered bearish when More bonds are called than issued over a given period of time Market interest rates are low or falling Market interest rates are high or rising The risk-free rate of return exceeds the required rate of return - Market interest rates are high or rising True or False: Behavioral finance suggests that investors react to new information in an efficient manner such that security prices accurately reflect the new information. - False Eurodollar bonds are Purchased with dollars, but redeemable in either euros or dollars Purchased with euros but redeemed in dollars Purchased and redeemed in dollars but issued by entities outside the U.S. 3COPYRIGHT © 2025 BY GRACE AMELIA, ALL RIGHTS RESERVED Purchased with dollars but redeemed in euros - Purchased and redeemed in dollars but issued by entities outside the U.S. Socially responsible funds are distinguished from other mutual funds because they Will sell their shares only to investors who sign a statement saying they do not smoke tobacco or use alcohol Do not charge any sales commission or management fees Invest only in companies that meet specified moral, ethical, or environmental standards Invest only in over-the-counter stocks - Invest only in companies that meet specified moral, ethical, or environmental standards True or False: Yield curves for corporate and government securities have similar shapes, but the corporate rates track below the government rates. - False Bonds with one of the top four ratings (Aaa through