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Investments Analysis And Management 3rd Canadian Edition By W. Sean Cleary – Test Bank

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  • ISBN-10 ‏ : ‎ 0470157593
  • ISBN-13 ‏ : ‎ 978-0470157596

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SKU:tb1002642

Investments Analysis And Management 3rd Canadian Edition By W. Sean Cleary – Test Bank

CHAPTER 1
Understanding Investments

MULTIPLE CHOICE
1. A Chartered Financial Analyst designation is a(an):
a. OSC-approved and awarded designation.
b. certification of a successful investing record.
c. professional designation awarded for meeting recognized standards of conduct and competency.
d. professional designation awarded by the brokerage industry.
Answer: c Topic: Investments as a Profession Level of Difficulty: Easy Type: Factual

2. Gold, gems, art and real estate would be classified as:
a. real assets.
b. indirect assets.
c. personal assets.
d. financial assets.
Answer: a Topic: The Nature of Investments Level of Difficulty: Easy Type: Factual

3. Another name for stockbrokers is:
a. specialists.
b. registered representatives.
c. security analysts.
d. portfolio managers.
Answer: b Topic: Investments as a Profession Level of Difficulty: Moderate Type: Factual

4. A portfolio:
a. is made of the asset holdings of an investor.
b. cannot include real assets.
c. is not evaluated after initially purchased.
d. is unimportant in overall financial planning.
Answer: a Topic: Structuring the Decision Process: Portfolio Management Level of Difficulty: Moderate Type: Factual

5. Underlying the evaluation of an investment is the trade-off between:
a. expected return and actual return.
b. low risk and high risk.
c. actual return and high risk.
d. expected return and risk.
Answer: d Topic: The Expected Return-Risk Tradeoff Level of Difficulty: Moderate Type: Factual

6. Most investors exhibit risk averse behaviour which means:
a. they will not assume more risk only unless they are compensated by higher expected returns.
b. they will always invest in investments providing the lowest possible risk.
c. they actively seek to maximize their risks.
d. they invest only in money market securities to avoid the risk inherent in the stock market.
Answer: a Topic: The Basis on Investment Decisions: Risk Level of Difficulty: Moderate Type: Factual

7. The discipline of security analysis concerns as its primary criterion to provide a(n):
a. analysis of the overall securities market and its direction.
b. valuation and analysis of individual securities.
c. purchasing securities at the best price.
d. determination of the investor’s required return.
Answer: b Topic: Structuring the Decision Process: Security Analysis
Level of Difficulty: Moderate Type: Factual

8. The ex ante risk-return trade-off as its basic principle suggests:
a. a higher expected return for investors who take on higher expected risk.
b. a lower expected return for investors who take on higher expected risk.
c. the same expected return for investors who take on higher expected risk.
d. the amount of expected return for investors is not directly related to the amount of expected risk.
Answer: a Topic: The Expected Return-Risk Tradeoff
Level of Difficulty: Easy Type: Factual

9. The expected return from an investment is:
a. contingent upon the historical return from that investment.
b. inversely related to the risk associated with that investment.
c. always equal to required return.
d. the anticipated return for some future period on that investment.
Answer: d Topic: The Expected Return-Risk Tradeoff Level of Difficulty: Moderate Type: Factual

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