THROUGH 79 RELATE TO PORTFOLIO MANAGEMENT. (10.5 MINUTES)...
Questions 73 through 79 relate to Portfolio Management. (10.5 minutes)
Which of the following portfolios will have the lowest diversification ratio? A portfolio of:
A)
30 equally-weighted stocks with companies from the same
industry.
B)
20 equally-weighted stocks with companies from different
industries.
C)
30 equally-weighted stocks with companies from different
Question #74 of 120
Question ID: 1146389
In a case where a client's capacity to bear risk is significantly less than the client's expressed willingness to bear risk, the most
appropriate action for a financial advisor is to:
counsel the client and attempt to change his attitude
towards risk.
base the assessment of risk tolerance in the IPS on
client’s ability to bear risk.
attempt to educate the client about investment risk and
correct any misconceptions.
Question #75 of 120
Question ID: 1146387
Which of the following statements about risk is most accurate?
The capital market line plots expected return against
market risk.
The efficient frontier plots expected return against
unsystematic risk.
The security market line plots expected return against
systematic risk.
Question #76 of 120
Question ID: 1146384
A portfolio manager is constructing a new equity portfolio consisting of a large number of randomly chosen domestic stocks.
As the number of stocks in the portfolio increases, what happens to the expected levels of systematic and unsystematic risk?
Systematic risk Unsystematic riskIncreases Remains the sameDecreases IncreasesRemains the same DecreasesQuestion #77 of 120
Question ID: 1146390
In an investor's IPS, a prohibition against investing in companies that sell tobacco products, alcohol, or products that are
harmful to the environment would be bestdescribed as:
regulatory factors.
unique preferences.
legal restrictions.
Question #78 of 120
Question ID: 1146380
Rolly Parker, CFA, has managed the retirement account funds for Misto Inc. for the last two years. Contributions and
withdrawals from the account are decided by Misto's CFO. The account history is as follows, with account values calculated
before same-date deposits and withdrawals:
Jan 1, 20X1 Beginning portfolio value $10 millionJul 1, 20X1 Account value $11.2 millionJul 1, 20X1 Deposit of cash $1.2 millionJan 1, 20X2 Account value $12.5 millionJan 1, 20X2 Withdrawal of cash $0.6 millionDec 31, 20X2 Account value $15 millionThe appropriate annual return to use in evaluating the manager's performance is closest to:
9%.
19%.
22%.
Question #79 of 120
Question ID: 1146379
Which of the following pooled investment shares is least likely to trade at a price different from its NAV?
Exchange-traded fund shares.
Open-end mutual fund shares.
Closed-end mutual fund shares.
Question #80 of 120
Question ID: 1146395