For an investor with a time horizon of five years and moderate risk tolerance, an appropriate asset allocation strategy would be

Question 11.92 pts
For an investor with a time horizon of five years and moderate risk tolerance, an appropriate asset allocation strategy would be
Group of answer choices

100 percent cash.

10 percent cash, 30 percent bonds, and 60 percent stocks.

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now
30 percent cash, 50 percent bonds, and 20 percent stocks.

100 percent bonds.

20 percent cash, 40 percent bonds, and 40 percent stocks.

Flag question: Question 2

Question 21.92 pts

Exhibit 4.7

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

 

Number December 31, 2011 December 31, 2012
Stock of Shares Price Value Price Value
A 5,000 $20 $100,000 $25 $125,000
B 8,000 $40 $320,000 $42 $304,000
C 15,000 $10 $150,000 $15 $225,000

 

Refer to Exhibit 4.7. What would be the total percentage change in an equally weighted portfolio of ABC?
Group of answer choices

13.33 percent

23.41 percent

36.83 percent

18.67 percent

26.67 percent

Flag question: Question 3

Question 31.92 pts
Modern portfolio theory assumes that most investors are
Group of answer choices

risk averse.

risk seekers.

risk embracing.

risk neutral.

risk tolerant.

Flag question: Question 4

Question 41.92 pts
Which phase is the stage when investors are more concerned to satisfy near-term needs such as children’s education or down payment on a home than save seriously for retirement?
Group of answer choices

Gifting

Spending

Divestiture

Consolidation

Accumulation

Flag question: Question 5

Question 51.92 pts
Which of the following is NOT a use of security market indicator series?
Group of answer choices

to use in the measurement of systematic risk

to use in the measurement of diversifiable (unsystematic) risk

to develop an index portfolio

to determine factors influencing aggregate security price movements

to use as a benchmark of individual portfolio performance

Flag question: Question 6

Question 61.92 pts
For an indexed portfolio, the fund manager will typically
Group of answer choices

attempt to replicate the composition of the particular index exactly.

generate high trading expense ratios.

not alter the weights when the index composition is changed.

generate high management expense ratios.

not replicate the composition of the particular index.

Flag question: Question 7

Question 71.92 pts
Which statement is true concerning alternative efficient market hypothesis?
Group of answer choices

The weak hypothesis encompasses the strong hypothesis.

The weak hypothesis encompasses the semi-strong hypothesis.

The semi-strong hypothesis encompasses the weak hypothesis.

The strong hypothesis relates only to public information.

The semi-strong hypothesis encompasses the strong hypothesis.

Flag question: Question 8

Question 81.92 pts
Unsystematic risk refers to risk that is
Group of answer choices

diversifiable.

due to market risk.

due to fundamental risk factors.

unexplainable.

undiversifiable.

Flag question: Question 9

Question 91.92 pts
           Adding international stocks to an all U.S. stock portfolio will most likely:
Group of answer choices

Increase the reward to risk ratio of the portfolio

Decrease the expected return of the portfolio

Increase the overall risk of the portfolio

b and d

Decrease the overall risk of the portfolio

Flag question: Question 10

Question 101.92 pts
The capital market line (CML) equation can be used to find the fair return on which of the following securities?
Group of answer choices

Efficient portfolios which include market portfolio

Mutual funds and ETFs

None of the above

Individual stocks

Individual stocks, efficient portfolios, and non-efficient portfolios.

Flag question: Question 11

Question 111.92 pts
The rate of exchange between future consumption and current consumption is the
Group of answer choices

coefficient of investment exchange.

pure rate of interest.

consumption/investment paradigm.

expected rate of return.

nominal risk-free rate.

Flag question: Question 12

Question 121.92 pts

Exhibit 1.7

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

 

You purchased 100 shares of GE common stock on January 1, for $29 a share. A year later you received $1.25 in dividends per share and you sold it for $28 a share.

 

Refer to Exhibit 1.7. Calculate your holding period return (HPR) for this investment in GE stock.
Group of answer choices

1.0086

0.9655

1.0973

1.0804

1.0357

Flag question: Question 13

Question 131.92 pts
The asset allocation decision must involve a consideration of
Group of answer choices

All of these are correct.

cultural differences.

the risk associated with different investments.

the objectives stated in the investor’s policy statement.

the types of assets that are appropriate for the investor.