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An active portfolio strategy is premised on

Hedge funds follow investment strategies such as

investments#3

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Questions 7

Answers

1
Hedge funds follow investment strategies such as
acquiring shares in mutual funds
underwriting new issues (IPOs)
limiting their portfolios to money market instruments
shorting “overvalued” stock while buying “undervalued” stock
2
An active portfolio strategy is premised on
the stock market being efficient
the portfolio manager's access to corporate management
the investor's being able to obtain public information
the stock market being inefficient
3
A strategy of averaging down will be profitable if
the price of the stock continues to fall
the firm retains earnings
the firm pays more dividends
the price of the stock subsequently rises
4
If the financial markets were not efficient,
prices indicate the proper valuation of securities
prices would adjust rapidly
all investors would profit
an investor may consistently outperform the market
5
An index fund limits its portfolio to
stocks included in an aggregate measure of stock prices
high quality securities
stocks of firms in a particular industry
stocks that respond to changes in the consumer prices (CPI)
6
If the required rate of return is 10 percent & the stock pays a fixed $5 dividend,its value is
$25
$50
$75
$100
7
Bought stock for $20 and sold it for $59.72 after 6 years. What was the annual rate of return?
39.86%
39.72%
198.6%
20%