Questions and Answers of Mutual Funds And Exchange

Explain why an alpha measure based on the domestic CAPM model is inappropriate for assessing the stock selection ability of a global mutual fund manager. Indicate in which situations an alpha measure
Differentiate between a traditional bond fund, target-date fund, and hybrid fund and discuss the role that an aging population is likely to play in the growth of these funds.
Identify the type of mutual fund that has the highest regulatory risk and explain why.
Identify the investment fund type that presents the most competition to the mutual fund industry and explain the survival strategies for mutual fund firms.
Identify two major reasons for the shift from CEFs to OEFs after the Crash of 1929.
Define both OEFs and CEFs.
Define the single index model and discuss its effectiveness in assessing performance of international ETFs.
Define the Sortino and Omega ratios and discuss their value in assessing ETF performance.
Discuss two factors used to measure the efficiency of ETFs.
Discuss two factors that affect the performance of ETFs.
Discuss three types of global equity fund managers’ timing skills.
Indicate two situations in which an alpha measure based on the global three-factor model, which includes the world market portfolio, global size, and value factors, may fail to correctly estimate the
Describe the difference between the world CAPM with a currency risk factor model and a two-factor IAPT model.
Identify two ways to consider currency risk in an alpha measure based on an international asset pricing model.
U.S. global mutual funds hold assets denominated in foreign currencies. Thus, their dollar returns are exposed to changes in the value of foreign currencies against the U.S. dollar. Identify a
Discuss why hedge funds in emerging markets gaining popularity and the factors that can best explain their performance.
Identify the factors that best explain the performance of EMMFs.
Contrast the risk-adjusted performance of EMMFs to those in developed markets such as the United States.
Outline the most effective models for evaluating the performance of EMMFs.
Contrast the growth of the EMMFs to the market for mutual funds in developed markets.
Explain why mutual funds should adopt ethical standards.
Identify two actions to mitigate conflicts of interest from asset management.
Discuss the implications if mutual funds do not adopt ethical standards.
Discuss the ethical standards of transparency, trust, and social responsibility for mutual funds.
Explain why ethics is important in finance.
Discuss the most popular forms of ETF investment strategies.
Discuss various investment roles played by ETFs.
Explain four factors that investors should consider when selecting ETFs.
Discuss the costs associated with investing in ETFs.
Discuss differences between prescriptive regulation (e.g., disclosure requirements) and remedial regulation (e.g., prohibitions on fraud).
Explain whether an equity fund is likely to use performance figures in a print advertisement if marketing an equity fund with a high relative 1-year total return, but with low or negative 5- and
Describe how ordinary retail investor behavior may depart from rational investment decision-making in choosing among funds to invest.
Explain whether mutual fund investors ever pay an unfair price for their shares in the fund. If not, discuss why disclosure regulation is necessary.
Compare and contrast disclosure regulation for mutual funds versus conventional public companies.
Explain the greatest irony in fund use of 12b-1 fees.
Identify the two most common uses of 12b-1 fees.
Discuss the motivation for adopting Rule 12b-1 fees.
List the five primary channels of distribution and indicate which channels are direct.
Identify the most likely future drivers of a mutual fund’s structure and services.
Discuss the major conclusions of studies that analyze the structure of a fund’s board and fund management regarding performance.
Identify the most critical services offered by mutual funds and fund complexes.
Explain the structure of a fund’s board including the most important decisions that its members make.
Describe how a mutual fund is organized, its legal and contractual relationships, and the motivation that drives this structure.
Discuss the rationale behind the methodology called “swing pricing.”
Identify the elements of an effective risk-mapping strategy for mutual funds.
Discuss how to quantitatively decompose mutual fund risks.
Describe the main points of financial due diligence for a mutual fund.
Discuss empirical results from mutual fund performance studies using the stochastic discount factor approach.
Discuss the weight-based performance measures of Ferson and Mo (2013).
Evaluate the alternative approaches used to estimate stochastic discount factors to evaluate fund performance.
Describe the stochastic discount factor approach to evaluating mutual fund performance.
Discuss whether some mutual fund managers exhibit skill or luck when they outperform.
Discuss how the Regulation Fair Disclosure Act of 2000 affected fund family size and mutual fund performance.
Explain the term active share and why it might predict future performance.
Identify the factors that are most likely to predict fund outperformance.
Discuss the direction and significance of the Carhart alpha and factor loadings and whether OARMX’s management team added value.
Use the four-factor regression approach for OARMX to calculate the Carhart alpha and factor loadings for Mkt – RF, SMB, HML, and momentum.
Discuss the meaning and significance of Jensen’s alpha for OARMX and whether OARMX’s management team added value.
Use the beta from the CAPM regression analysis to calculate the Treynor ratio for OARMX. Compare this Treynor ratio to those in the chapter found for FMAGX and the market index ˆSP500TR.
Use a single factor CAPM regression analysis to calculate Jensen’s alpha and beta for OARMX.
Calculate the total return, standard deviation of returns, CV, Sharpe ratio, and M2 for OARMX. Compare the answers for OARMX to those found in the chapter for FMAGX and the market benchmark index
Explain how to compute turnover and its importance when screening funds.
Discuss the evidence on whether actively managed funds outperform the market.
Identify mistakes that investors should avoid when selecting mutual funds.
Discuss the fees and expenses of mutual funds and their impact on returns.
Discuss the importance of rebalancing a portfolio.
Identify the three characteristics of an effective benchmark for an SAA analysis.
Explain the steps needed to determine a portfolio’s SAA.
Define SAA and TAA.
Discuss several measures of active management.
Identify the potential benefits and concerns of indexed investing.
Discuss the types of active investing and screening for socially responsible funds.
Distinguish between active and passive mutual funds.3. Identify the potential benefits and concerns of indexed investing.
Discuss whether SRMFs are likely to remain a niche financial product in the future.
Discuss several hypotheses to explain why the performance between SRMFs and conventional funds may differ significantly on a risk-adjusted basis.
Explain whether a best strategy exists for constructing SRMF portfolios.
Friedman contends that a necessary trade-off exists between corporate “social responsibilities” and corporate profits. Provide an argument against this view.
Explain closet indexing.
Explain how trading distorts risk analysis.
Define performance attribution.
Discuss issues with measuring alpha.
Describe the universe of securities available to municipal bond mutual fund managers.
Describe the dimensions available for analyzing the bond mutual fund market.
Define window dressing and discuss its occurrence in bond mutual funds.
Discuss the challenges faced by bond index mutual fund managers compared with equity indexing.
Identify four vehicles for investors to acquire exposure to the fixed-income market and describe advantages and disadvantages of each.
Discuss how the current MMMF structure can create runs on funds.
Discuss why money fund managers sometimes waive fees.
Explain how MMMFs maintain a constant $1 a share NAV.
Discuss why MMMFs developed.
Explain why the performance of a LIETF could differ substantially from its stated return objective.
Discuss why the market for LIETFs has grown so rapidly despite the risks associated with them.
Discuss the most important risks that individual investors should know about LIETFs before investing.
Identify several potential benefits of using LIETFs.
Discuss whether a need exists for a hybrid ETF such as an ETMF.
Explain how individual investors, institutional investors, and financial advisors use ETFs.
Explain how passive, active, and Smart Beta ETFs differ.
Discuss why ETFs are considered tax-efficient vehicles and how their tax treatment differs from mutual funds.
Identify four main differences between mutual funds and ETFs.
Examine potentially effective trading strategies for CEFs.

Showing 1 - 100 of 129