International Finance And Treasury - Study Mode

[#96] Markowitz efficient hypothesis initiated in
Correct Answer

(D) 1960

Explanation

Solution: Markowitz efficient hypothesis initiated in 1960. Harry Markowitz model (HM model), also known as Mean-Variance Model because it is based on the expected returns (mean) and the standard deviation (variance) of different portfolios, helps to make the most efficient selection by analyzing various portfolios of the given assets.

[#97] A closed-end fund is a mutual fund in which shares issue just when fund is
Correct Answer

(A) organized

Explanation

Solution: A closed-end fund is a mutual fund in which shares issue just when fund is organized. A closed-end fund (CEF) or closed-ended fund is a collective investment model based on issuing a fixed number of shares which are not redeemable from the fund.

[#98] Which type of market efficiency declares that current security prices totally reflect all information, equally public and private
Correct Answer

(C) Strong

Explanation

Solution: Strong type of market efficiency declares that current security prices totally reflect all information, equally public and private. Strong form efficiency is the most stringent version of the efficient market hypothesis (EMH) investment theory, stating that all information in a market, whether public or private, is accounted for in a stock's price.

[#99] Asset allocation is procedure of scattering your assets between numerous different kinds of investments to
Correct Answer

(C) lessen risk

Explanation

Solution: Asset allocation is procedure of scattering your assets between numerous different kinds of investments to lessen risk. Asset allocation is an investment strategy that aims to balance risk and reward by apportioning a portfolio's assets according to an individual's goals, risk tolerance and investment horizon.

[#100] Considering bonds characteristics, corporate and treasury bonds have many
Correct Answer

(A) different characteristics

Explanation

Solution: Considering bonds characteristics, corporate and treasury bonds have many different characteristics. Unlike stocks, each bond contract has unique characteristics that define how repayment will occur. Every bond contract has at least five components: the borrower, price, date of maturity, value of maturity and coupon rate.