8-24 Session

Question 1

Items are collected in groups to permit fast and convenient processing. Records of all transactions affecting a particular master file (i.e. payroll) are accumulated over a period of time, arranged in sequence, and processed against the master file.

Answer 1

Batch processing

Question 2

This type of processing occurs when a computer captures data electronically, edits it for accuracy and completeness, and updates the master file as the transaction occurs.

Answer 2

Online Real Time Processing

Question 3

Used in electronic data processing and contains relatively permanent information used for reference and updated periodically.

Answer 3

Master file

Question 4

The ________ is a measure of the volatility of the stock portfolio or the entire market.

Answer 4

beta coefficient

Question 5

The ________ was the first index developed as an objective measure that could apply to all investors whatever their risk preferences. It argued that there were 2 components of risk: those produced by market fluctuations and risk of fluctuations in the individual stock.

Answer 5

Treynor index

Question 6

The Treynor index formula

Answer 6

(Portfolio return - risk free rate) divided by beta.

Question 7

The _________ is similar to the Treynor index, except that the risk measure is the standard deviation of the portfolio.

Answer 7

Sharpe measure

Question 8

The ________ measure is a measure of absolute performance on a risk adjusted basis and measures the portfolio manager’s ability to achieve higher returns than expected for the level of risk accepted.

Answer 8

Jensen

Question 9

The Sharpe measure formula

Answer 9

(Portfolio return - risk free rate) divided by the standard deviation of the portfolio

Question 10

Jensen measure formula

Answer 10

Risk free rate + (return on market index - risk free rate) x beta

Question 11

The Fed selling bonds, increased interest rates, and decreased money supply are policies used to ________

Answer 11

Contain inflation

Question 12

The Fed would cut interest rates, expand its level of asset purchases, commit to short-term interest rates near zero, and take steps to reduce the value of the dollar in terms of purchasing power to _______

Answer 12

contain deflation

Question 13

The _______ does not adjust for the time value of money. It computes the length of time required to recover the initial cash investment with net cash flows.

Answer 13

Payback period.

Question 14

The payback method primarily focuses on the _________ of an investment, or liquidity

Answer 14

rapid recovery

Question 15

The method of applying a mathematical formula to estimate future time to produce units is known as ________.

Answer 15

Learning curve analysis.