1 . Which investor type would most likely have high tolerance for risk, long investment horizon, and low liquidity needs?

a) pension funds

b) commercial banks

c)individuals

d) mutual funds

2. Which manager most likely receives the highest compensation through fees?

a) passive manager

b) fixed income asset manager

c) smart beta manager

d) alternative asset manager

3. A no-load mutual fund will most likely charge which of the following fee?

a) redemption fee

b) up front fee

c) management fee

d) all of the above

4. The diversification between any two assets most likely to occur when which of the following conditions is met?

a) Correlation between the two assets is less than 1.0

b) Correlation between the two assets is greater than 1

c) Correlation between the two assets is strictly negative

d) Correlation between the two assets is strictly zero

5. When the economy is at the lowest point of the business cycle (the "through"), which are the best industries to invest in?

a) Cyclical industries with high sensitivity to the state of the economy

b) Cyclical industries with low sensitivity to the state of the economy

c) Defensive industries with low cyclicality

d) Defensive industries with high sensitivity to the state of the economy