Key Terms

Question 1

What is used to determine the required rate of return of an asset if it is going to be added to an already diversified portfolio given that specific asset’s non-diversifiable risk.

Answer 1

Capital Asset Pricing Model (CAPM)

Question 2

What is the return that is in excess of the return predicted by the capm

Answer 2

Alpha

Question 3

What is the hypothesis that everything to be know is already know and there is now way to beat the market

Answer 3

The Efficient Market Hypothesis

Question 4

The weak form of efficient market hypothesis you may profit from using what form of analysis

Answer 4

Fundamental

Question 5

Where do publicly traded companies file information with the SEC

Answer 5

EDGAR

Question 6

When is an 8K du

Answer 6

wi/in 4 days of a significant event

Question 7

When is a 10Q due

Answer 7

three times a year (quarterly) unaudited

Question 8

When is a 10K due

Answer 8

annually, audited

Question 9

When must mutual fund holders receive reports

Answer 9

2 times a year

Question 10

what measures short term liquidity

Answer 10

current ratio

Question 11

what does a thinly traded market mean

Answer 11

liquidity risk

Question 12

what measures risk adjusted return

Answer 12

sharpe ratio

Question 13

what is the name of the foreign currency exchange market

Answer 13

FOREX

Question 14

what includes all raw materials and manufactured goods bought, sold or given away

Answer 14

the balance of trades account which is part of the current account

Question 15

how do you calculate working capital

Answer 15

current liabilities from current assets

Question 16

what is at least two consecutive quarters of decline in a country’s gross domestic product

Answer 16

recession

Question 17

what is the current ratio

Answer 17

current assets / current liabilities

Question 18

which yield curve has always preceded a recession in our economy

Answer 18

negative yield curve

Question 19

what is inflation adjusted gdp

Answer 19

real gdp

Question 20

what do you get when you subtract the risk free rate of return from the actual return and divide by the standard deviation

Answer 20

sharpe ratio

Question 21

What are the hours of the Forex

Answer 21

24 hours, except weekends

Question 22

what is the maximum fee a no load mutual fund can charge?

Answer 22

.25%

Question 23

what rating in s&p and moody’s are investment grade and higher

Answer 23

BBB and Baa

Question 24

what is the Black Scholes pricing model for

Answer 24

Options

Question 25

what rating is high yield junk bond

Answer 25

B an Bb

Question 26

what is a bond’s “prospectus” called

Answer 26

an indenture

Question 27

what do you need to calculate yield to call

Answer 27

present value of the bond, the interest payments to be paid until the call date, and the price that the bond is going to be called at

Question 28

what does a country have to have to have an emerging market

Answer 28

a stable government

Question 29

An investment advisor is permitted to take physical custody of a customer’s moneys or securities:

Answer 29

Only if the Administrator does not prohibit this by rule and the advisor notifies the Administrator that he or she has or will take custody