Question 1

Which of the following is not a money market security

Options :

A : Treasury notes

B : Treasury bills

C : Bankers' acceptances

D : Commercial paper

Answer: A

Question 2

By market convention, which of the following currencies are not quoted in terms of 'direct quotes' versus the USD?

Options :

A : EUR

B : EUR

C : KWD

Answer: A

Question 3

Which of the following will have the effect of increasing the duration of a bond, all else remaining equal:

I. Increase in bond coupon

II. Increase in bond yield

III. Decrease in coupon frequency

IV. Increase in bond maturity

Options :

A : III and IV

B : I and III

C : I and II

D : II, III and IV

Answer: A

Question 4

Which of the following describes the efficient frontier most accurately?

Options :

A :

The efficient frontier identifies portfolios with the lowest level of volatility for the lowest possible returns

B : The efficient frontier identifies portfolios with the highest return for a given level of volatility

C : The efficient frontier identifies portfolios with the highest level of volatility for a given level of returns

D : None of the above

Answer: B

Question 5

What is the standard deviation (in dollars) of a portfolio worth $10,000, of which $4,000 is invested in Stock A, with an expected return of 10% and standard deviation of 20%; and the rest in Stock B, with an expected return of 12% and a standard deviation of 25%. The correlation between the two stocks is 0.6.

Options :

A : $2,081

B : $1,201

C : $1,204

D : $4,330,000

Answer: A