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FINC 340 INVESTMENTSFINAL EXAMINATION_0431In

FINC 340 INVESTMENTSFINAL EXAMINATION_0431In the accumulation phase of the investor life cycleA:investors with long-term time horizons should accept onlylow risk.B:investors have high net worth.C:investors are saving for retirement only.D:investors may seek to accumulate wealth through higher riskinvestments.E:none of these choices apply.32The semi-strong form of the efficient market hypothesis states:A:Security prices reflect all information, public and privateB:Security prices reflect all public informationC:Security prices reflect all market informationD:Security prices reflect all accounting informationE:Security prices reflect all economic information33A company currently has $3.50 earnings per share of which $1.05 is paid inannual dividends per share. If the growth rate for the firm is 4% per yearand the required return is 9%, what is the theoretical P/E ratio?A:5.71B:6.00C:6.24D:6.66E:7.0034Given returns of 15%, -8%, 12%, and 5%, what is the difference betweenthe arithmetic average and geometric average?A:0.00%1
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FINC 340 INVESTMENTSFINAL EXAMINATION_04B:0.07%C:0.39%D:1.30%E:1.53%35Deviations of a straddle include:A:ButterflyB:CollarC:StrangleD:All of the above are deviations of a straddleE:A and C are deviations of a straddle, but B is not36An immunization strategy protects a portfolio from:A:Interest rate riskB:Default riskC:Liquidity riskD:Prepayment riskE:Event risk37The semi-strong form of the efficient market hypothesis states:A:Security prices reflect all information, public and privateB:Security prices reflect all public informationC:Security prices reflect all market informationD:Security prices reflect all accounting informationE:Security prices reflect all economic information38Susan has a 5-year “bunny bond” with a yield to maturity of 6.4% that willbe automatically reinvested next month. She is considering liquidating thebond and reinvesting in a 10-year 3.5% coupon bond with a yield tomaturity of 6.5%. Market rates are very unstable and are just as likely to2
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