Exam (elaborations)
CRPC -Module 2
- Course
- Institution
Exam of 8 pages for the course CRPC Sample Tests at CRPC Sample Tests (CRPC -Module 2)
[Show more]
Seller
Follow
denicetho
Content preview
CRPC -Module 2Fund JKL has a mean return of 8% and a standard deviation of 12, and its returns are
evenly distributed.
This would mean that 68% of the time its returns would fall between
a. -4% and +20%
b. +4% and +20%
c. -8% and +8%
d. -16% and +32% - ANS-a. -4% and +20%
Assuming the market is currently returning 12% and the beta of your stock is .8.
What percentage return can you expect on your stock?
a. 2.4%
b. 8.0%
c. 9.6%
d. 14.4% - ANS-c. 9.6%
Jezebel owns four stocks in various industries. She has come to you to assess the risk
she is taking.
You inform her that her portfolio is subject to which one of the following types of risk,
and why?
a. purchasing power risk, because stocks fluctuate with inflation.
b. systematic risk, because the stocks she owns are in various industries.
c. political risk, since companies are subject to the laws of the countries in which they
operate
d. unsystematic risk, because she owns only four stocks. - ANS-d. unsystematic risk,
because she owns only four stocks.
Which one of the following statements is correct?
a. Reinvestment, exchange rate, and liquidity risk are examples of systematic risk.
b. Default, purchasing power, and political risk are examples of nondiversifiable risk.
, c. A company without debt will have no financial risk, but will have business risk, which
is a type of unsystematic risk.
d. Default, call, and liquidity risk are unique to bonds and not applicable to stocks. -
ANS-c. A company without debt will have no financial risk, but will have business risk,
which is a type of unsystematic risk.
Beta is a measure of a stock's
a. range of returns
b. total risk
c. variability
d. volatility - ANS-d. volatility
Hector has been investing for years, and has approximately three quarters of his
portfolio invested in stock index and bond index funds, which he rebalances periodically.
He has the remainder of his portfolio invested in oil and health care stocks, which he
believes provide above-average price appreciation potential over the next few years.
His style of asset allocation would be best described as
a. strategic
b. tactical
c. dynamic
d. core/satellite - ANS-d. core/satellite
An investor has a 6%, $10,000 par value bond that matures in 15 years. The yield to
maturity on similar bonds currently is 5.5%.
What is the price of this bond?
a. $1,050.62
b. $5,779.16
c. $9,509.99
d. $10, 506.23 - ANS-d. $10, 506.23
Rex owns a corporate bond that currently sells for $1,090. The coupon rate is 9%, and
the bond matures in 23 years. The bond is callable in eight years at $1,020.
What is the yield to call of this bond?
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller denicetho. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $9.34. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
79373 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now