Q. A benchmark index is reconstituted when the index:

1. list has changed.
2. constituents have stock splits.
3. security weights have changed.

Q. Which of the following institutional investors most likely must spend a target percentage of the portfolio annually?

1. Endowments
2. Life insurance firms
3. Property and casualty insurance firms

Q. A register can be described as an internal document that:

1. describes an organisations mission, values and objectives.
2. articulates business relationships and obligations undertaken by parties.
3. contains obligations, past actions, and future or outstanding requirements.

Q. The average compound return earned per year over a multi-year period is known as the:

1. arithmetic mean return.
2. geometric average return.
3. normal distribution of returns.

Q. Performance attribution on an active portfolio strategy is designed to:

1. measure the levels of risk within a portfolio.
2. assess from where a fund manager's performance was derived.
3. measure how well a fund manager is performing relative to an expected return.

Q. An investor holding a short position in a maturing futures contract may:

1. have to deliver the underlying asset to the holder of the long position.
2. exercise the option to sell the asset to the holder of the long position.
3. take delivery of the underlying asset from the holder of the long position.

Q. The coupon rate on a callable bond compared to an otherwise identical non-callable bond would most likely be:

1. lower.
2. equal.
3. higher.

Q. All else being equal, which bonds typically have the widest credit spreads?

1. A-rated corporate bonds
2. AA-rated corporate bonds
3. AAA-rated corporate bonds

Q. Alpha is best measured by which of the following?

1. Market risk
2. A factor model
3. Peer-group benchmarks

Q. In the structure of a typical private equity fund, investors are commonly referred to as:

1. limited partners.
2. general partners.
3. public shareholders.

Q. The buyer of an option contract:

1. receives the premium when the contract is initiated.
2. must trade the underlying asset at the exercise price.
3. has the right to trade the underlying asset at the exercise price.

Q. In primary security markets investors buy securities from:

1. traders.
2. issuers.
3. exchanges.