Reading 48: Portfolio Management: An Overview

The portfolio perspective on investing implies that an investment should be evaluated primarily based on its:

Which of the following statements best describes the effect of diversification on a portfolio?

The diversification ratio is calculated as the ratio of:

Calculate the diversification ratio for a portfolio of 20 stocks if the average standard deviation of returns for the stocks is 30 percent and the standard deviation of the equally weighted portfolio is 21 percent.

If the diversification ratio of a portfolio is 1.0, this implies that:

Portfolio diversification is least effective during:

Which of the following is the first step in the portfolio management process?

The Investment Policy Statement (IPS) is primarily created during which stage of portfolio management?

In the execution step of portfolio management, top-down analysis typically begins with:

Which activity occurs during the feedback step of the portfolio management process?

Which of the following investors is most likely to have a long investment horizon and high risk tolerance?

The investment objective of a bank is primarily to:

Which type of insurance company typically has a longer investment horizon?

In a defined contribution pension plan, the investment risk is borne by the:

A defined benefit pension plan promises to pay a retiree:

Sovereign wealth funds are investment pools owned by:

Buy-side firms in the asset management industry are defined as those that:

Active management attempts to:

What is 'smart beta'?

Robo-advisors primarily offer:

Net Asset Value (NAV) of a mutual fund share is calculated as:

An open-end mutual fund:

Which of the following mutual fund types charges a fee for purchasing shares?

Closed-end funds differ from open-end funds in that closed-end funds:

Money market funds primarily invest in:

Compared to passively managed funds, actively managed mutual funds generally have:

Exchange-traded funds (ETFs) are most similar to closed-end funds in that they:

Which of the following is a potential tax advantage of ETFs over open-end mutual funds?

A separately managed account (SMA) differs from a mutual fund because:

Hedge funds are typically characterized by:

Private equity funds primarily invest in:

Venture capital funds are a subcategory of private equity that focuses on:

Buyout funds typically generate returns by:

If the average standard deviation of 10 stocks is 25 percent and the standard deviation of the portfolio holding these 10 stocks is 20 percent, what is the diversification ratio?

Top-down security analysis usually starts with:

Which investor type is characterized by a long time horizon, high risk tolerance, and low liquidity needs, specifically to fund a university?

Real Estate Investment Trusts (REITs) are typically included in which asset class category?

Which of the following describes a key trend in the asset management industry?

A 'multi-boutique' asset management firm is best described as:

If a mutual fund's assets are valued at 100 million USD and it has 5 million shares outstanding, what is its Net Asset Value (NAV) per share?

Which of the following is a characteristic of passively managed index funds?

Typically, which of the following funds would have the highest risk tolerance?

Which statement about insurance companies is accurate?

A 'no-load' fund refers to a mutual fund that:

Which pooled investment vehicle trades at intraday prices?

Which of the following best describes 'sell-side' firms?

The Investment Policy Statement (IPS) should be updated:

Which mutual fund type aims to maintain a stable Net Asset Value (NAV), typically one currency unit?

Hedge funds generally have:

A 'robo-advisor' is most likely to appeal to: