Question 1

Using the following hyperlink, calculate the beta for ANZ.

hyperlink: https://flinders-my.sharepoint.com/:x:/g/personal/obay0002_flinders_edu_au/EQkJBKKwej1AtCvEN9FBHGsB21Y6Q8lX3APuvPDJeL68Yw?e=G147b7

Select one:

a. 0.87

b. 0.46

c. 1.05

d. 1.23 

Question 2

Factors related to risk taking ability include all of the following except:

Select one:

a. Wealth levels

b. Liquidity requirements

c. Time horizon

d. Past experiences 

e. None of the above

Question 3

Total risk (systematic risk + firm-specific risk) can be measured by:

Select one:

a. unsystematic risk

b. beta

c. semi-variance

d. standard deviation 

e. value-at-risk

Question 4

Which of the following conditions must be satisfied in order for a portfolio to appreciate in value over time?

Select one:

a. The required return must exceed the client’s liquidity requirements

b. The required return must not exceed the client’s liquidity requirements

c. The portfolio must meet all liquidity requirements with distributions only Incorrect

d. The required return must equal the client’s liquidity requirements

Question 5

Suppose an investor wishes to rank active funds, based on historical performance, on their ability to generate both consistent and positive abnormal returns. Given this investment mandate, this investor should:

Select one:

a. Rank active funds according to their alpha 

b. Rank funds according to alpha and retain only those funds that have statistically significant alphas

c. Rank funds according to their tracking error

d. Rank active funds according to the Information Ratio

e. Rank active funds according to the Treynor Ratio

Question 6

Fundamental indices use all of the following, except _________________, to determine constituent weightings.

Select one:

a. cash flows

b. sales

c. book value of assets

d. dividends

e. the present value of expected growth opportunities 

Question 7

Calculate the Semi-variance for Fund ABC using the following returns:

Annual Fund Returns

Select one:

a. 6.58%

b. 5.11%

c. 2.11%

d. None of the above 

Question 8

Which of the following asset allocations would be considered most consistent with a balanced portfolio?

Select one:

a. 20% Money Market, 80% Domestic Equities

b. 100% Fixed Income

c. 70% Fixed Income, 30% Domestic Equities

d. 50% Domestic Equities, 50% International Equities

e. 5% Money Market; 35% Fixed Income; 60% Domestic Equities 

Question 9

Which of the following investment options would be most suitable for an investor seeking to (1) generate alpha and (2) retain the highest level of diversification possible?

Select one:

a. 100% in a growth fund

b. 50% in an active value fund & 50% in an active growth fund 

c. 100% in an ASX 200 passive index fund

d. 100% in an active value fund

Question 10

Which type of investment approach is expected to deliver the highest information ratio?

Select one:

a. passive fund management

b. indexation

c. active fund management

d. semi-active fund management (i.e. enhanced indexation)

e. both a & b