Question 1

The material wealth of a society is a function of

Accepted Answer

A)  all financial assets.
B)  all real assets.
C)  all financial and real assets.
D)  all physical assets.E) A) and C)
F) A) and D)

Question 2

The Sarbanes-Oxley Act

Accepted Answer

A)  requires corporations to have more independent directors.
B)  requires the firm's CFO to personally vouch for the firm's accounting statements.
C)  prohibits auditing firms from providing other services to clients.
D)  requires corporations to have more independent directors and requires the firm's CFO to personally vouch for the firm's accounting statements.
E)  All of the above.F) A) and D)
G) C) and D)

Question 3

Asset allocation refers to

Accepted Answer

A)  choosing which securities to hold based on their valuation.
B)  investing only in "safe" securities.
C)  the allocation of assets into broad asset classes.
D)  bottom-up analysis.E) All of the above
F) None of the above

Question 4

Until 1999, the ________ Act(s)  prohibited banks in the United States from both accepting deposits and underwriting securities.

Accepted Answer

A)  Sarbanes-Oxley
B)  Glass-Steagall
C)  SEC
D)  Sarbanes-Oxley and SECE) B) and D)
F) B) and C)

Question 5

Which of the following is true about mortgage-backed securities? I)  They aggregate individual home mortgages into homogeneous pools.
II)  The purchaser receives monthly interest and principal payments received from payments made on the pool.
III)  The banks that originated the mortgages maintain ownership of them.
IV)  The banks that originated the mortgages may continue to service them.

Accepted Answer

A)  II, III, and IV
B)  I, II, and IV
C)  II and IV
D)  I, III, and IVE) B) and D)
F) B) and C)

Question 6

Which of the following portfolio construction methods starts with asset allocation?

Accepted Answer

A)  Top-down
B)  Bottom-up
C)  Middle-out
D)  Buy and holdE) A) and D)
F) B) and C)

Question 7

In 2016, ____________ was(were)  the least significant financial asset(s)  of U.S.nonfinancial businesses in terms of total value.

Accepted Answer

A)  cash and deposits
B)  trade credit
C)  trade debt
D)  inventory
E)  marketable securitiesF) C) and E)
G) A) and D)

Question 8

A fixed-income security pays

Accepted Answer

A)  a fixed level of income for the life of the owner.
B)  a fixed stream of income or a stream of income that is determined according to a specified formula for the life of the security.
C)  a variable level of income for owners on a fixed income.
D)  a fixed or variable income stream at the option of the owner.E) A) and C)
F) A) and B)

Question 9

Money market securities

Accepted Answer

A)  are short term.
B)  are highly marketable.
C)  are generally very low risk.
D)  are highly marketable and are generally very low risk.
E)  All of the options.F) A) and B)
G) A) and C)

Question 10

Financial assets permit all of the following except

Accepted Answer

A)  consumption timing.
B)  allocation of risk.
C)  separation of ownership and control.
D)  elimination of risk.E) C) and D)
F) B) and D)

Question 11

Which of the following portfolio construction methods starts with security analysis?

Accepted Answer

A)  Top-down
B)  Bottom-up
C)  Middle-out
D)  Buy and holdE) C) and D)
F) None of the above

Exam 1: The Investment Environment

The material wealth of a society is a function of

Correct Answer
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Money market securities

Correct Answer
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A fixed-income security pays

Correct Answer
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In 2016, ____________ was(were) the least significant financial asset(s) of U.S.nonfinancial businesses in terms of total value.

Correct Answer
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Which of the following portfolio construction methods starts with asset allocation?

Correct Answer
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Financial assets permit all of the following except

Correct Answer
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Which of the following portfolio construction methods starts with security analysis?

Correct Answer
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Asset allocation refers to

Correct Answer
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Until 1999, the ________ Act(s) prohibited banks in the United States from both accepting deposits and underwriting securities.

Correct Answer
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The Sarbanes-Oxley Act

Correct Answer
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Exam 1: The Investment Environment

The material wealth of a society is a function of

Correct AnswerverifiedShow Answer

Money market securities

Correct AnswerverifiedShow Answer

A fixed-income security pays

Correct AnswerverifiedShow Answer

In 2016, ____________ was(were) the least significant financial asset(s) of U.S.nonfinancial businesses in terms of total value.

Correct AnswerverifiedShow Answer

Which of the following portfolio construction methods starts with asset allocation?

Correct AnswerverifiedShow Answer

Financial assets permit all of the following except

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Which of the following portfolio construction methods starts with security analysis?

Correct AnswerverifiedShow Answer

Asset allocation refers to

Correct AnswerverifiedShow Answer

Until 1999, the ________ Act(s) prohibited banks in the United States from both accepting deposits and underwriting securities.

Correct AnswerverifiedShow Answer

The Sarbanes-Oxley Act

Correct AnswerverifiedShow Answer

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