Investments

Question 1

Standard deviation characteristics

Answer 1

Nondiversified, unsystematic, variability, total risk

Question 2

Beta characteristics

Answer 2

Systematic, PRIME, volatility

Question 3

Which bonds produce phantom income?

Answer 3

STRIPS, zeros, OID

Question 4

t-bill vs t-note vs t-bond maturity

Answer 4

3-12 mo, 1-10 yr, 10-30yr

Question 5

t-bill vs t-note vs t-bond amounts

Answer 5

$100-1M, $1k-100k, $1k-1M

Question 6

Where does OID phantom income come from, how is basis affected

Answer 6

From discount, increases basis

Question 7

Does GIC have interest rate risk

Answer 7

NO

Question 8

EE/I bonds shared characteristics

Answer 8

issued @ face value, fed tax on interest @ redemption

Question 9

I bond payments

Answer 9

guaranteed fixed rate + CPI variable rate 2x/yr

Question 10

UIT characteristics

Answer 10

passive, self-liquidating, redeemed @ NAV, 1st sale: S6, 2nd sale: S7

Question 11

ADR declared in what country

Answer 11

foreign

Question 12

Marketable vs liquid

Answer 12

stocks, bonds, MF, ETFs vs cash, checking, CDs, MM funds, T-bills

Question 13

Open end MF

Answer 13

new shares, purch/redeemed w/issuer

Question 14

Does Fed control fed funds rate

Answer 14

NO - overnight bank to bank loan rates

Question 15

normal vs lognormal

Answer 15

% vs $

Question 16

Dividends/gains & basis

Answer 16

cash: doesn’t increase basis / reinvested: increases basis, don’t add to CF

Question 17

Coefficient of variation

Answer 17

SD/average return

Question 18

Risk adjusted return

Answer 18

Average return/b

Question 19

When is barbell strategy good?

Answer 19

rising interest rates

Question 20

What to buy when inverted –> normal yield curve

Answer 20

long term bonds

Question 21

Return on equity

Answer 21

EPS/price

Question 22

Black sholes

Answer 22

^exercise price - lower call value

Question 23

QBI for REITS not allowed in

Answer 23

c-corp,retirement accounts

Question 24

% investments in REITS

Answer 24

75% real estate, 15% securities

Question 25

ETF characteristics

Answer 25

margin, sold all day, short sell, stoploss/limit

Question 26

Who controls margin

Answer 26

Fed (Reg T)

Question 27

Annualized return

Answer 27

(1+Rp)^n - 1

Question 28

1933 Sec Act

Answer 28

primary market, transparent statements

Question 29

1934 Sec Exch Act

Answer 29

SEC, secondary market

Question 30

1940 Inv Co Act

Answer 30

mutual funds, hedge funds

Question 31

1940 Inv ADV Act

Answer 31

IAs, SEC $100M

Question 32

R2

Answer 32

Coefficient of determination

Question 33

Increase coupon rate or YTM does what to duration

Answer 33

DECREASES

Question 34

What does immunization protect from

Answer 34

interest rate fluctuations, reinvestment rate risk

Question 35

How are dividends taxed

Answer 35

ordinary income

Question 36

Recovered depreiation taxed at?

Answer 36

0.25

Question 37

Value expressed in?

Answer 37

$$

Question 38

Is preferred stock dividend fixed?

Answer 38

YES

Question 39

AMT for bonds?

Answer 39

private activity bond interest

Question 40

If stock is married to option

Answer 40

exercise & write LTCG

Question 41

Why trade options rather than selling

Answer 41

avoid resetting CG clock

Question 42

When do EE/I bonds produce phantom income

Answer 42

If owner elects to pay annually

Question 43

alpha/treynor or sharp for diversified?

Answer 43

alpha/treynor

Question 44

prime rate set by

Answer 44

banks