WEL Mock Flags Flashcards
UIT can or cannot trade during market hours?
Cannot
Is land impacted by changing microeconomic or macroeconomic conditions more?
Micro
Investors choosing to utilize smart beta strategies choose managers who apply various factors to capture what?
Capture inaccuracies in pricing.
A developed market nation has a currency that has increased relative to foreign currencies in countries that typically engage in trade. The trend is expected to continue for a few years. The indirect consequence of the increase may be: (in relation to local economies in emerging markets)
Weakening local economies in emerging markets.
The portfolio management methodology exhibited by rebalancing is
Buy/sell strategy
Buy low, sell high.
Low volatility’s correlation with low risk?
Low volatility does not have a correlation with low risk.
Embracing the Fama and French model means rejecting what theory or hypothesis?
The weak form of the Efficient Market Hypothesis.
A consultant utilizing risk-adjusted measures would like to see a measure that demonstrates a manager’s value to the investor relative to other funds during a secular bear market. He should be inclined to look at what measurement?
Jensen’s alpha.
A disadvantage of using holdings based attribution analysis is that it will (in relation to return)?
Will not reconcile to performance return.
A magazine specializing in the hedge fund industry publishes a guide to selecting liquid and illiquid hedge funds. Among the differences, illiquid funds have higher or lower layering fees?
Lower
A fund seeks to profit from mergers in stocks they hold to suitors, both domestic and international. Funds seeking out strategies like these are called ________ funds in the investing community.
Event-driven
An investor is worried about the impact of a company announcement on a security. In order to delay the tax ramifications of the sale until the new year, what is the best strategy?
Engage in a collar strategy.
Would treasury rates be useful to investors who are considering long-term investments in emerging markets?
No
Dow Theory tenets are correctly explained by acknowledging that: (in terms of retracement)
Medium swings retrace movement.
After hearing about Modern Portfolio Theory (MPT), a consultant concludes optimization can lead to (in relation to return and risk):
Optimization can lead to higher return for a lower level of risk.
Overconfidence can lead an investor to take which action (in relation to information processing):
Overconfidence generally causes investors to ignore negative information when they feel confident in a specific investment.
A consultant working with a longtime client suggests that the client should review their tendencies and see whether perhaps they are overestimating their risk tolerance threshold. The consultant believes that the client is:
The correct answer is a follower.
A consultant reviewing future progress of the manager during a search would or would not review capital market expectations?
Would not
During manager search and selection, would experience of manager be received before or after screening criteria?
After
When evaluating UMIFA and UPMIFA standards, which of the following is true?
A) UMIFA provides stronger guidance on rules for fiduciary care than UPMIFA.
B) UPMIFA provides stronger guidance on rules for fiduciary care than UMIFA.
C) UMIFA and UPMIFA rules are identical, but apply to different entities.
D) Only UMIFA standards are used in courts of law.
B) UPMIFA provides stronger guidance on rules for fiduciary care than UMIFA.
FINRA guidelines and rules were specifically created to apply to:
A) registered investment advisors.
B) registered representatives.
C) investment advisor representatives.
D) Investment portfolio managers using discretion
B) registered representatives.
