Investment Planning Flashcards
1
Q
What ratio standardizes portfolio performance in excess of the risk-free rate by standard deviation of the portfolio?
A
The Sharpe Ratio
2
Q
What are the issue terms for TIPS?
A
5, 10, and 30 years, $100 increments
3
Q
Of the following organizations, which one is backed by the full credit of the U.S. government:
- FNMA (Fannie Mae)
- FHLMC (Freddie Mac)
- GNMA (Ginnie Mae)
- FFCB (Federal Farm Credit Bank)
- FHLB (Federal Home Loan Bank)
- TVA (Tennessee Valley Authority)
A
GNMA (Ginnie Mae)
4
Q
What is the formula to determine the tax equivalent yield (TEY) for municipal bonds?
A
TEY = Tax Exempt Yield / 1- Marginal Rate
