Question: kindly answer all the questions please, if not please dont take the question thanks! 1.Treasury Bills have the following characteristics: [I] Maturity no longer than
kindly answer all the questions please, if not please dont take the question thanks!
1.Treasury Bills have the following characteristics: [I] Maturity no longer than one year [II] Interest payment every six months [III] Little to no default risk
| I only | ||
| I and II only | ||
| I and III only | ||
| II and III only | ||
| I, II and III |
2.
A portfolio holds stocks in Index A, a value-weighted index consist of Stocks X and Y. During last month, Stock X appreciated in price while Stock Y depreciated. In order to maintain a value weight, this portfolio needs to: [I] Sell Stock X and buy Stock Y [II] Buy Stock X and sell Stock Y [III] Do nothing
| I only | ||
| II only | ||
| III only | ||
| None of the above | ||
| I, II and III |
3.
Which of the following are FALSE statements regarding buying securities using margin trading? [I] Interests are charged against the loan amount. [II] The investor earns any dividend pay-out during the holding period. [III] The investor needs not put up cash upfront. [IV] Investors need to keep the initial margin requirement throughout their course of trading
| I only | ||
| II and III | ||
| III and IV | ||
| III only | ||
| None of the above |
4.
Which of the following are TRUE statements regarding short selling? [I] Gains are maximized when stock price hits zero. [II] The investor may incur a net loss when the price of the underlying security remains unchanged. [III] The investor needs not put up cash upfront.
| I only | ||
| II only | ||
| I and II | ||
| III only | ||
| None of the above |
5.
Amy has a risk-aversion A=3. The risk-free rate is 6%. The risky portfolio has an expected return = 18% and variance=16%. What % of her complete portfolio should she invest in the risky portfolio?
| 7.5 % | ||
| 10.0 % | ||
| 12.5 % | ||
| 25.0% | ||
| None of the above |
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