1. When considering a diversified portfolio, which of the following is an appropriate measure of risk?

2. Bill has noticed that the stock she purchased tends to have a very tight distributions around the mean but there seems to be a high probability of outliers"(multi-deviation returns). this is most indicative of what type of curve?"

3. Michael has subscribed to various investment magazines and data resources, which he religiously reads and analyzes. Michael utilizes this analysis to make shifts in his high beta portfolio on a daily basis. Which behavioral finance bias is Michael subject to?

4. How do the stock split and stock dividend impact the shareholders without bringing about any changes in the value of the company on the balance sheet?

5. Modern asset allocation is based upon the model developed by Harry Markowitz. Which of the following statements is/are correctly identified with the model?
1. The risk, return and covariance of assets are important input variables in creating portfolios.
2. Negatively correlated assets are necessary to reduce the risk or portfolios.
3. In creating a portfolio, diversifying across asset types (e.g., stocks and bonds) is less effective than diversifying within an asset type.
4. The efficient frontier is relatively insensitive to the input variable.

6. Which of the following would you use to ascertain the chairman's perspective for progress completed and expected for the coming year?

7. Which of the following statements is true regarding the Securities Investors Protection Act of 1970?

8. Stock index funds and exchange traded funds that track market indices are subject tow which of the following risks?

9. Which of the following would serve as an analytical tool to provide information to a client regarding small-cap growth stocks?

10. MSFT declared a dividend payable to shareholders on the record date of Wed. May 15th. Which is the last possible date an investor could purchase the stock and still receive the dividend?

11. You own 1,000 shares of eJunk stock. You purchased these shares for $25 per share on margin with a %50 initial margin requirement and a 25% maintenance margin requirement. eJunk has experienced some reversals in the pummeling that tech stocks have received recently. The price has dropped to $13 per share. Will there be a margin call? If so, how much?

12. An old Wall Street saying is 'Cut your losses and let your profits run.' However, investors often do the opposite. It seems that people are reluctant to admit they made a mistake in purchasing a stock that subsequently performs poorly. This behavior is most consistent with:

13. Which of the following would you use to ascertain the chairman's perspective for progress completed and expected for the coming year?

14. When combining asset classes, an investor begins to receive diversification benefits when correlation is:

15. Mutual fund XYZ has a 5-year return of 12%, with a standard deviation of 15%. Fund XYZ has a Beta of 1.4, with a correlation of .90 to the S&P. What Percent of the return from fund XYZ is due to the S&P?

16. Mia buys a stock for $50 using an initial margin of 75% and a maintenance margin of 40%. At what price will she receive a margin call?

17. Barry has the following investment opportunities: which one is more risky?

18. Stock index funds and exchange traded funds that track market indice are subject to which of the following risks?

19. Which of the following are non diversifiable risk?
1. business risk
2. management risk
3. company or industry riskv4. Market risk
5. interest rate risk
6. purchasing power risk

20. Barry has the following investment opportunities: which one is more risky?

21. Which broad market index would be more appropriate to use when conducting comparisons between a large-cap, blue chip portfolio, and the securities market?

22. Michael has subscribed to various investment magazines and data resources, which he religiously reads and analyzes. Michael utilizes this analysis to make shifts in his high beta portfolio on a daily basis. Which behavioral finance bias is Michael subject to?

23. You own 1,000 shares of eJunk stock. You purchased these shares for $25 per share on margin with a %50 initial margin requirement and a 25% maintenance margin requirement. eJunk has experienced some reversals in the pummeling that tech stocks have received recently. The price has dropped to $13 per share. Will there be a margin call? If so, how much?

24. Modern asset allocation is based upon the model developed by Harry Markowitz. Which of the following statements is/are correctly identified with the model?
1. The risk, return and covariance of assets are important input variables in creating portfolios.
2. Negatively correlated assets are necessary to reduce the risk or portfolios.
3. In creating a portfolio, diversifying across asset types (e.g., stocks and bonds) is less effective than diversifying within an asset type.
4. The efficient frontier is relatively insensitive to the input variable.

25. Mutual fund XYZ has a 5-year return of 12%, with a standard deviation of 15%. Fund XYZ has a Beta of 1.4, with a correlation of .90 to the S&P. What Percent of the return from fund XYZ is due to the S&P?