idx int32 | question_id string | context string | question string | options list | image_1 image | image_2 image | image_3 image | image_4 image | image_5 image | image_6 image | image_7 image | image_type string | answers string | explanation string | topic_difficulty string | question_type string | subfield string | language string | main_question_id string | sub_question_id string | is_arithmetic int32 | ans_image_1 image | ans_image_2 image | ans_image_3 image | ans_image_4 image | ans_image_5 image | ans_image_6 image | release string |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
300 | english_179_4_r1 | nan | Based on Exhibit 1 and the notes following the exhibit, Arcadia is least likely in compliance with the GIPS standards with regard to the: | [
"A. performance presentation.",
"B. measure of internal dispersion.",
"C. performance record."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Arcadia is required by the GIPS standards to present five years of performance because the composite has been in existence for that period. The small-cap composite was started on 31 December 2007. For each composite presented to be GIPS compliant, the Standards require that firms show at least 5 years of an... | hard | multiple-choice | portfolio management | english | 179 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
301 | english_179_5_r1 | nan | Regarding the notes to Exhibit 1, the GIPS standards would most likely imply that: | [
"A. Notes 1 and 7 are required and Note 2 is recommended.",
"B. Notes 3 and 8 are required and Note 6 is recommended.",
"C. Notes 1 and 2 are required and Note 7 is recommended."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A . Note 1 is required. It describes the definition of the firm used to determine the total firm assets. Note 2 is recommended because the firm is encouraged but not required to provide a list of the firms contained within the parent company. Note 7 is required because firms must disclose which dispersion meas... | hard | multiple-choice | portfolio management | english | 179 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
302 | english_180_1_r1 | The Ptolemy Foundation was established to provide financial assistance for education in the field of astronomy. Tom Fiske, the foundation’s chief investment officer, and his staff of three analysts use a top-down process that begins with an economic forecast, assignment of asset class weights, and selection of appropri... | Regarding the approaches to economic forecasting, the statement by which analyst is most accurate | [
"A. Poulsen",
"B. Tuoc",
"C. Spenser"
] | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Spenser's statement is most accurate. In the economic indicators approach, for example, the composite of leading economic indicators is based on an analysis of its forecasting usefulness in past cycles. The indicators are intuitive, simple to construct, require only a limited number of variables, and third-... | hard | multiple-choice | economics | english | 180 | 1 | 0 | Not supported with pagination yet | release_basic | ||||||||||
303 | english_180_2_r1 | nan | Using the data in Exhibit 1 and the labor-based method chosen by the team, the most likely estimate for the 10-year annual GDP growth is: | [
"A. 3.5%.",
"B. 3.6%.",
"C. 3.0%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | C | Answer = C. The simplest way to analyze an economy's aggregate trend growth is to split it into
growth from changes in employment (growth from labor inputs), and
growth from changes in labor productivity.
For longer-term analysis, growth from changes in employment is broken down further into growth in the size of the p... | hard | multiple-choice | economics | english | 180 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
304 | english_180_3_r1 | nan | Using the data in Exhibit 2 and Fiske's preferred approach, the estimated expected annual return for US large-cap equities over the next 10 years is closest to | [
"A. 7.9%.",
"B. 7.6%.",
"C. 7.4%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | B | Answer = B <ans_image_2> | hard | multiple-choice | economics | english | 180 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
305 | english_180_4_r1 | nan | Using the data in Exhibit 3 and the investment team's approach to predict the Fed's next move, the new fed funds rate will most likely be: | [
"A. 2.9%.",
"B. 2.1%.",
"C. 2.6%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | B | Answer = B <ans_image_3> | hard | multiple-choice | economics | english | 180 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
306 | english_180_5_r1 | nan | Using the data in Exhibit 4 and Fiske's suggested approach, the forecast of the expected return for small-cap emerging market equities is closest to: | [
"A. 9.5%.",
"B. 8.9%.",
"C. 9.9%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | A | Answer = A. The Singer–Terhaar approach for determining the expected return on an asset class involves determining the risk premium arising from systematic risk as a weighted average of the risk premiums arising from a fully integrated market and fully segmented market, where the weights for the fully integrated market... | hard | multiple-choice | economics | english | 180 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
307 | english_180_6_r1 | nan | Among the three countries examined by the investment team, which is in the most attractive phase of the business cycle for equity returns | [
"A. Hungary",
"B. Ireland",
"C. Spain"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. The most favorable phases when considering equity returns are initial recovery and early upswing whereas the late upswing, slowdown, and recession phases carry the greater risk for equities. Hungary has the combination of factors consistent with the initial recovery/early upswing phases of the business cycl... | hard | multiple-choice | economics | english | 180 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
308 | english_181_1_r1 | Andres Rioja is the treasurer of Empresas Crianza. His duties have recently been expanded to include oversight of the firm’s pension fund. Given his limited experience in overseeing investments, he is relying on an outside consultant. Rioja prepares a number of questions for his first meeting with the consultant, Manol... | Is Priorat's statement with regard to selecting a benchmark for the pension plan most likely correct | [
"A. No, because Crianza should select a high-quality long-term corporate bond index as the benchmark",
"B. Yes",
"C. No, because the current benchmark is appropriate to measure each strategy's performance"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The investor with liabilities will measure success by whether the portfolio generates the funds necessary to pay the cash outflows associated with the liabilities. In other words, meeting the liabilities is the investment objective; as such, it also becomes the benchmark for the pension plan. Although Crian... | easy | multiple-choice | fixed income | english | 181 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
309 | english_181_2_r1 | nan | For which portfolio in Exhibit 1 is a sampling approach most likely to be used in an attempt to match the primary index risk factors? | [
"A. Treasury STRIPs",
"B. Emerging market bond fund",
"C. Mortgage-backed securities fund"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The mortgage-backed securities fund strategy uses enhanced indexing. This management style uses a sampling approach in an attempt to match the primary index risk factors and achieve a higher return than under full replication. | easy | multiple-choice | fixed income | english | 181 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
310 | english_181_3_r1 | nan | If Rioja rebalances the portfolio as he proposes in his statement to Priorat, the dollar duration of the assets relative to the dollar duration of the liabilities is most likely to: | [
"A. fall well short.",
"B. be far exceeded.",
"C. be nearly matched."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | C | Answer = C. The portfolio has to be rebalanced to match the dollar duration of the liabilities. The liabilities have dollar duration of $4,000,000 (thousands) × 14 = $56,000,000 (thousands). The mortgage-backed securities fund is the asset class that poses contingent claim risk, so it is being liquidated, and the $700,... | easy | multiple-choice | fixed income | english | 181 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
311 | english_181_4_r1 | nan | In Priorat’s response to Rioja regarding the explanation of key measures of an index’s profile, he is most likely correct regarding | [
"A. key rate duration and incorrect regarding convexity adjustment.",
"B. spread duration and incorrect regarding effective duration.",
"C. convexity adjustment and incorrect regarding key rate duration."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Priorat’s explanation of key rate duration is accurate, whereas his explanation of convexity adjustment is incorrect. A convexity adjustment is used to improve the accuracy of the index’s estimated price change for large parallel changes in interest rates. A convexity adjustment is an estimate of the change... | hard | multiple-choice | fixed income | english | 181 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
312 | english_181_5_r1 | nan | With regard to evaluating secondary market trades, Priorat is least likely correct with respect to | [
"A. credit-upside trades.",
"B. yield/spread pickup trades.",
"C. curve-adjustment trades"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Yield/spread pickup trades should be evaluated in a total return framework. In a total return framework, both yield and spread, as well as price appreciation or depreciation, should be considered. A bond that offers higher yield may pose the potential for a capital loss if it is riskier than a lower-yieldin... | hard | multiple-choice | fixed income | english | 181 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
313 | english_181_6_r1 | nan | Priorat is most likely correct with regard to which structural trade | [
"A. Putables",
"B. Bullets",
"C. Callables"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Front-end bullets (i.e., bullet structures with one-year to five-year maturities) have great appeal for investors who pursue a barbell strategy in which both the short and long end of the barbell are US Treasury securities. There are “barbellers” who use credit securities at the front or short end of the cu... | hard | multiple-choice | fixed income | english | 181 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
314 | english_182_1_r1 | William Gatchell, is an investment analyst with the Sonera Endowment Fund. Sonera is considering hiring a new equity investment manager. In preparation, Gatchell meets with Anjou Lafite, another analyst at the fund, to review a relevant part of the endowment’s investment policy statement: Funds will be invested in the ... | Based on Exhibit 1, which investment manager most likely meets the criteria established in the endowment's investment policy statement? | [
"A. Manager B",
"B. Manager C",
"C. Manager A"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Manager B has a positive information ratio, demonstrating that he has been able to deliver active returns relative to his level of tracking error. Manager B's investment style is consistent with a value investment style, with a higher beta for the two value indices—the small-cap value index and the large-ca... | hard | multiple-choice | equity | english | 182 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
315 | english_182_2_r1 | nan | Based on Exhibit 1, is there sufficient information for Gatchell to create and interpret the results of a style box? | [
"A. No, because additional holdings data are required",
"B. Yes",
"C. No, because additional index data are required"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Holdings data are required to create a style box and interpret the results. Gatchell is given the styles and the assets under management but not each individual investment or holding that each investment manager has selected. | easy | multiple-choice | equity | english | 182 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
316 | english_182_3_r1 | nan | Which fee structure is most appropriate for Sonera, based on the criteria in the investment policy statement | [
"A. An ad valorem fee structure",
"B. A performance-based fee structure with a high-water mark",
"C. A performance-based fee structure with a fee cap"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Ad valorem fee structures are both simple and predictable. The ad valorem fee structure is calculated by multiplying the value of the assets by a percentage. | easy | multiple-choice | equity | english | 182 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
317 | english_182_4_r1 | nan | If the investment policy committee decides to accept Gatchell's recommendation to also use passive investing, the index structure that least likely meets Gatchell's requirement is | [
"A. a price-weighted index.",
"B. an equal-weighted index.",
"C. a value-weighted index."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. An equal-weighted index is biased toward small-capitalization stocks. | hard | multiple-choice | equity | english | 182 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
318 | english_182_5_r1 | nan | In his statement to Lafite, Gatchell is least likely correct with respect to: | [
"A. periodic rollover.",
"B. redemption.",
"C. cost."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Gatchell is correct that stock index futures and equity swaps are low-cost alternatives to equity index mutual funds. He is also correct that a drawback of stock index futures is that they have to be rolled over periodically. He is incorrect about the pricing of mutual funds: They are priced once daily | hard | multiple-choice | equity | english | 182 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
319 | english_182_6_r1 | nan | Is Gatchell's statement regarding true active return and misfit active return correct | [
"A. Yes",
"B. No, he is incorrect about misfit active return",
"C. No, he is incorrect about true active return"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The definition of misfit active return is incorrect. Misfit active return is the difference between the normal benchmark and the investor's benchmark. | hard | multiple-choice | equity | english | 182 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
320 | english_183_1_r1 | Anna Lehigh, is a portfolio manager for Brown and White Capital Management (B&W), a US-based institutional investment management firm whose clients include university endowments. Packer College is a small liberal arts college whose endowment is managed by B&W. Lehigh is considering a number of derivative strategies to ... | Lehigh's response to Gulen is most likely correct when the option is: | [
"A. out of the money.",
"B. in the money.",
"C. at the money."
] | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. At expiration, at-the-money call options move very rapidly to a delta of 1 or 0. At this point, the gamma is the highest and it is very difficult to maintain a delta-hedged position. | easy | multiple-choice | derivatives | english | 183 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||||
321 | english_183_2_r1 | nan | Based on the data in Exhibit 2, modifying the duration of the fixed-income allocation to its target will require an interest rate swap that has notional principal closest to: | [
"A. $11,030,000.",
"B. $17,777,000",
"C. $9,412,000."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | A | Answer = A. <ans_image_1> | easy | multiple-choice | derivatives | english | 183 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
322 | english_183_3_r1 | nan | If the price of Mountain Hawk stock declines to $88.00, which options strategy will most likely have the highest value at expiration? | [
"A. Bull spread",
"B. Straddle",
"C. Bear spread"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The bear spread strategy will have a value of $10. A bear (put) spread entails buying the put with the higher exercise price ($100) and selling the put with the lower exercise price ($90). Value at expiration = max(0, 100 – 88) – max(0, 90 – 88) = 10. | easy | multiple-choice | derivatives | english | 183 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
323 | english_183_4_r1 | nan | Will Lehigh's purchase of US large-cap futures contracts most likely result in the committee's beta objective for the US large-cap investment being attained | [
"A. No, because the beta will be above the target",
"B. Yes",
"C. No, because the beta will be below the target"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | C | Answer = C. Purchasing 15 futures contracts increases the beta to 1.00, not 1.10. Purchasing 45 futures contracts is necessary to attain the beta target. <ans_image_2> | hard | multiple-choice | derivatives | english | 183 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
324 | english_183_5_r1 | nan | Given the committee's view about the sovereign debt crisis, which hedging strategy is most likely to result in Packer earning the US risk-free rate of return | [
"A. Strategy 3",
"B. Strategy 1",
"C. Strategy 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Shorting European stock market futures, selling euros, and buying US dollars will result in the Packer endowment fund earning the US risk-free rate. | hard | multiple-choice | derivatives | english | 183 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
325 | english_183_6_r1 | nan | Which of the following swaps will least likely capture the greatest economic benefit, based on the committee's 24-month market view | [
"A. Swap 1",
"B. Swap 3",
"C. Swap 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Receiving the underperforming index (mid cap) and paying the outperforming index (small cap) will result in a net negative payment. | hard | multiple-choice | derivatives | english | 183 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
326 | english_184_1_r1 | Manuel Silva is a principal at Raintree Partners, a financial advisory firm, and a specialist in providing advice on risk management and trading strategies using derivatives. Raintree’s clients include high-net-worth individuals, corporations, banks, hedge funds, and other financial market participants. One of Silva’s ... | Is Silva's response to Sampras regarding reducing exposure to Eagle Corporation stock most likely correct | [
"A. No, he is incorrect about covered calls",
"B. No, he is incorrect about protective puts",
"C. Yes"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Silva is incorrect about covered calls. Covered calls do not provide protection against downside losses. They do limit upside gains. | hard | multiple-choice | derivatives | english | 184 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
327 | english_184_2_r1 | nan | Based on the information in Exhibit 1, the maximum profit per contract for Strategy A is closest to: | [
"A. $9,015.",
"B. $5,855.",
"C. $2,545."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. In the butterfly spread, using calls the investor goes long the $1,100 and $1,150 strikes and short two of the $1,125 strike. The maximum profit is when the index is at $1,125. The maximum profit per contract = Profit on long $1,100 + Profit on two short $1,125 + Profit on long $1,150 = ($1,125 – $1,100) – ... | hard | multiple-choice | derivatives | english | 184 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
328 | english_184_3_r1 | nan | Based on the information presented in Exhibit 1, the maximum loss per contract for Strategy B is closest to: | [
"A. $20,900.",
"B. $10,350.",
"C. $12,850."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The straddle consists of a long call and a long put at a strike price of $1,125. The maximum loss occurs when the index is at $1,125, when the call and put are at the money. The maximum loss = Call premium + Put premium = $80.50 + $48.00 = $128.50. Per the contract, the loss is $100 × $128.50 = $12,850. | hard | multiple-choice | derivatives | english | 184 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
329 | english_184_4_r1 | nan | The expected volatility of the S&P 500, relative to market expectations, is least likely to be a factor in the decision to implement | [
"A. Strategy",
"B. B. Strategy",
"C. C. Strategy"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Strategy C is a collar, which is a directional strategy; that is, its performance is dependent on the direction of the movement of the underlying (in this instance, the S&P 500). The performance of Strategy A (butterfly spread) and Strategy B (straddle) are based on the expected volatility (relative to the ... | hard | multiple-choice | derivatives | english | 184 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
330 | english_184_5_r1 | nan | Based on Silva's advice, the effective annual interest rate for First Citizen Bank's loan is closest to: | [
"A. 5.75%.",
"B. 4.56%.",
"C. 6.38%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | C | Answer = C. <ans_image_1> | hard | multiple-choice | derivatives | english | 184 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
331 | english_184_6_r1 | nan | Assuming Silva's advice is followed and Libor rates are 5% and 6% on 15 October 2013 and 15 December 2013, respectively, the effective annual interest rate on Short Hills Corporation's loan is closest to: | [
"A. 3.50%.",
"B. 5.42%.",
"C. 4.64%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The effective annual rate is calculated as follows: Future value of call premium on 15 December <ans_image_2> | hard | multiple-choice | derivatives | english | 184 | 6 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
332 | english_185_1_r1 | Kamiko Watanabe, is a portfolio adviser at Wakasa Bay Securities. She specializes in the use of derivatives to alter and manage the exposures of Japanese equity and fixed-income portfolios. She has meetings today with two clients, Isao Sato and Reiko Kondo. Sato is the manager of the Tsushima Manufacturing pension fund... | The number of Nikko Bond Performance Index futures Sato must sell to rebalance the Tsushima pension fund to its target allocation is closest to | [
"A. 743.",
"B. 149.",
"C. 1,594."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | A | Answer = A. <ans_image_1> | hard | multiple-choice | derivatives | english | 185 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||||
333 | english_185_2_r1 | nan | The number of Nikkei 225 Index futures Sato must buy to rebalance the Tsushima pension fund to its target allocation is closest to: | [
"A. 4,148.",
"B. 3,293.",
"C. 3,950."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. <ans_image_2> | hard | multiple-choice | derivatives | english | 185 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
334 | english_185_3_r1 | nan | Which of these is most likely to be a characteristic of one of the two swaps Watanabe describes to Sato | [
"A. Receive return on Nikko Bond Performance Index",
"B. Pay return on Nikkei 225 Index",
"C. Receive Libor"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. One of the swaps would be pay Nikko Bond Performance Index return and receive Libor. | hard | multiple-choice | derivatives | english | 185 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
335 | english_185_4_r1 | nan | The duration of the swap in Watanabe's first proposal to Kondo is closest to: | [
"A. –1.75.",
"B. –2.00.",
"C. –2.75."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. A pay-fixed (receive-floating) position in an interest rate swap is similar to issuing a fixed-rate bond and buying a floating-rate bond with the proceeds. The duration of the fixed-rate bond is approximately 75% of the maturity, and the swap is short this duration. The duration of the floating-rate bond is... | hard | multiple-choice | derivatives | english | 185 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
336 | english_185_5_r1 | nan | Is the notional principal of the swap Watanabe recommends to Kondo most likely correct | [
"A. No, it is too high",
"B. Yes",
"C. No, it is too low"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. <ans_image_3> | hard | multiple-choice | derivatives | english | 185 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
337 | english_185_6_r1 | nan | Which of Watanbe's three statements to Kondo is least likely correct | [
"A. Statement 3",
"B. Statement 1",
"C. Statement 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The original swap is pay-fixed, implying that the offsetting swap would be pay-floating. A receiver swaption provides its owner with the right to enter a pay-floating (receive-fixed) in a swap at the exercise fixed rate, whereas a payer swaption provides the right to enter the swap in a pay-fixed position. | hard | multiple-choice | derivatives | english | 185 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
338 | english_186_1_r1 | REDD Partners specializes in forecasting and consulting in particular sectors of the equity market. Minglu Li is an analyst for REDD and specializes in the consumer credit industry. Last year (2012), Li and her team gathered data to determine the expected return for the industry, shown in Exhibit 1.
<image_1>
After ... | Based on Exhibit 1 and the method used by Li's team, the expected return for the consumer credit industry in 2012 was closest to | [
"A. 12.8%.",
"B. 12.2%.",
"C. 12.4%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The bond-yield-plus-risk-premium method sets the expected return to the yield to maturity on a long-term government bond plus the equity risk premium (12.2% = 3.8% + 8.4%). | hard | multiple-choice | portfolio management | english | 186 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||||
339 | english_186_2_r1 | nan | The SCI data most likely exhibits which type of bias? | [
"A. Survivorship",
"B. Data-mining",
"C. Time-period"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. The SCI data is an index that is not composed of the same number of firms each period because of firm failures and combinations through time, which is indicative of a survivorship bias. | hard | multiple-choice | portfolio management | english | 186 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
340 | english_186_3_r1 | nan | Based on the correlation that Li's team believes to exist between the CCIRP and TELIRP, the new volatility for the SCIRP is closest to: | [
"A. 56.4%.",
"B. 31.8%.",
"C. 49.1%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | A | Answer = A. <ans_image_1> | hard | multiple-choice | portfolio management | english | 186 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
341 | english_186_4_r1 | nan | A comparison between the survey data containing projections of the CCI and TELI and the actual CCI and TELI most likely exhibits | [
"A. a status quo trap.",
"B. ex post risk being a biased measure of ex ante risk.",
"C. a recallability trap."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. As stated, the projections in the survey data tended to be more volatile than the actual outcomes over the same time period. This result indicates that the ex-post risk (i.e., the volatility of the actual data) tends to have a downward bias relative to the ex ante risk displayed by the survey data. This ten... | hard | multiple-choice | portfolio management | english | 186 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
342 | english_186_5_r1 | nan | Based on how the Taylor rule is applied by Li's team, the central bank's estimated optimal short-term rate is closest to: | [
"A. 2.8%.",
"B. 1.5%.",
"C. 2.0%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The Taylor rule sets the optimal short-term rate as Neutral rate + 0.5 × (GDP growth forecast – GDP growth trend) + 0.5 × (Inflation forecast – Inflation target). Applying numbers from Exhibit 3, 2.0% = 2.5% + 0.5 × (2.0% ‒ 1.0%) + 0.5 × (1.5% ‒ 3.5%). | hard | multiple-choice | portfolio management | english | 186 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
343 | english_186_6_r1 | nan | Tolliver's statement regarding the yield curve is most likely: | [
"A. incorrect with regard to fiscal policy.",
"B. incorrect with regard to monetary policy.",
"C. correct."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. A flat yield curve is consistent with tight monetary policy and loose fiscal policy, which means that Tolliver’s statement is incorrect with regard to fiscal policy. | hard | multiple-choice | portfolio management | english | 186 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
344 | english_187_1_r1 | Brian O'Reilly is a capital markets consultant for the Tennessee Teachers' Retirement System (TTRS). O'Reilly is meeting with the TTRS board to present his capital market expectations for the next year. Board member Kay Durden asks O'Reilly about the possibility that data measurement biases exist in historical data. O'... | With respect to his explanation of survivorship bias, O'Reilly most likely is: | [
"A. correct.",
"B. incorrect, because survivorship bias results in an overly pessimistic view of expected returns.",
"C. incorrect, because survivorship bias results in a downward bias to reported returns."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. | easy | multiple-choice | portfolio management | english | 187 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
345 | english_187_2_r1 | nan | With respect to his explanation of appraisal data bias, O'Reilly most likely is | [
"A. correct.",
"B. incorrect, because calculated correlations with other assets tend to be biased downward in absolute value.",
"C. incorrect, because the true variance of the asset is biased upward."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. O'Reilly's explanation of appraisal data bias is incorrect because calculated correlations with other assets tend to be smaller in absolute value compared with the true correlations. O'Reilly is correct in that appraisal values tend to be less volatile than market-determined values for identical assets, and... | hard | multiple-choice | portfolio management | english | 187 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
346 | english_187_3_r1 | nan | With respect to his answer to Brown's question, O'Reilly most likely is | [
"A. incorrect, because high-frequency data tend to produce lower correlation estimates.",
"B. incorrect, because high-frequency data are less sensitive to asynchronism.",
"C. correct."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. O'Reilly's answer is incorrect with respect to correlation estimates. High-frequency data are more sensitive to asynchronism across variables and, as a result, tend to produce lower correlation estimates. | hard | multiple-choice | portfolio management | english | 187 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
347 | english_187_4_r1 | nan | Is O'Reilly's explanation of the anchoring trap most likely correct | [
"A. No, because the anchoring trap is the tendency for the mind to give a disproportionate weight to the first information it receives on a topic",
"B. No, because the anchoring trap is the tendency to temper forecasts so that they do not appear extreme",
"C. Yes"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. O'Reilly's explanation of the anchoring trap is incorrect. The anchoring trap is the tendency of the mind to give disproportionate weight to the first information it receives on a topic. Initial impressions, estimates, or data anchor subsequent thoughts and judgments. | hard | multiple-choice | portfolio management | english | 187 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
348 | english_187_5_r1 | nan | Given the data in Exhibits 1 and 2, the covariance between Market 1 and Market 2 is closest to: | [
"A. 0.0225.",
"B. 0.0243.",
"C. 0.0027."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The covariance between Market 1 and Market 2 is calculated as follows: M12 = (1.20 × 0.90 × 0.0225) + (0 × 0 × 0.0025) + [(1.20 × 0) + (0 × 0.90)] × 0.0022 = 0.0243. | hard | multiple-choice | portfolio management | english | 187 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
349 | english_187_6_r1 | nan | Given O'Reilly's forecasts for the European market, the expected long-term equity return using the Grinold–Kroner model is closest to | [
"A. 6.35%.",
"B. 8.35%.",
"C. 7.35%."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | B | Answer = B. <ans_image_1> <ans_image_2> | hard | multiple-choice | portfolio management | english | 187 | 6 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
350 | english_188_1_r1 | McMorris Asset Management (MCAM) is an investment adviser based in Atlanta, Georgia. Tom Morris manages the active equity portfolios. Dan McKeen manages the semiactive equity portfolios and the semiactive derivatives portfolios. They are preparing to meet with Maggie Smith, the chief investment officer of Philaburgh Ca... | Based on Exhibit 1, the approach that is least likely efficient with respect to delivering active returns for a given level of tracking risk is: | [
"A. active equity.",
"B. semiactive derivatives.",
"C. semiactive equity"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. The active equity strategy has the lowest information ratio and is thus least efficient in delivering active returns. Information ratio = Active return (Portfolio – Benchmark)/Tracking risk. The information ratio is 0.5%, which is the lowest of the three. | easy | multiple-choice | equity | english | 188 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
351 | english_188_2_r1 | nan | Based on Exhibits 2 and 3, what can Smith most likely determine about MCAM's investment style over time? MCAM's style has: | [
"A. drifted from value to growth.",
"B. not drifted.",
"C. drifted from growth to value"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The active equity strategy was not value oriented because the returns-based style analysis indicates a growth orientation given a 0.65 coefficient of determination with respect to growth returns. The current holdings, however, depict a value orientation when compared with the manager's normal benchmark give... | easy | multiple-choice | equity | english | 188 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
352 | english_188_3_r1 | nan | Which of the risks Morris identifies with respect to MCAM's active equity strategy is least likely applicable to a growth-oriented investor? | [
"A. Risk 3",
"B. Risk 1",
"C. Risk 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. The main risk for a value-oriented investor rather than a growth-oriented investor is misinterpreting a stock's cheapness within the investor's time horizon. | hard | multiple-choice | equity | english | 188 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
353 | english_188_4_r1 | nan | The type of portfolio that Morris recommends to Smith to take advantage of both US and European equity market opportunities is most likely a(n): | [
"A. completeness fund.",
"B. core satellite.",
"C. alpha and beta separation."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Alpha and beta separation involve combining an index strategy with a market-neutral active strategy in order to earn a desired beta + alpha outcome. Smith's objective is to realize returns from the European market (beta) + MCAM's active return (alpha). In this case, by using the EURO STOXX 50 index strategy... | easy | multiple-choice | equity | english | 188 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
354 | english_189_1_r1 | Aina Monts, is a fixed-income portfolio manager at Girona Advisors. She has been awarded the management of a €150 million portfolio for Fondo de Pensiones Lerida, a pension fund based in Barcelona, Spain. The previous manager was fired for underperforming the benchmark by more than 100 bps in each of the last three yea... | Based on Monts's Statement 1, the extension of classical immunization theory that Monts will use to meet Lerida's investment objective is best described as: | [
"A. symmetrical cash flow matching.",
"B. multiple liability immunization.",
"C. contingent immunization."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. An extension of classical immunization is to integrate immunization strategies with elements of active management strategies. The difference between the 6.75% yield to maturity and 6.25% required rate is the cushion spread. As long as there is a spread cushion, the manager can actively manage part of or the... | easy | multiple-choice | fixed income | english | 189 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
355 | english_189_2_r1 | nan | Based on Exhibit 1, the cash required to rebalance the Lerida portfolio is closest to | [
"A. €12,027,000.",
"B. €533,000.",
"C. €3,331,000."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | screenshot | A | Answer = A. The portfolio has to be rebalanced to the initial level of dollar duration. The portfolio market value and dollar duration are provided for both periods. First calculate dollar duration as: Market value × Duration × 0.01. <ans_image_1> | easy | multiple-choice | fixed income | english | 189 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
356 | english_189_3_r1 | nan | Based on the data in Exhibit 2, Mont’s positioning of the portfolio would suggest that the sector that poses the most tracking error relative to the benchmark is | [
"A. Treasuries.",
"B. corporate bullets.",
"C. MBS."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Contribution to spread duration is the key measure that provides the relative sensitivity to movements in spreads for a particular sector. The portfolio has an overweight to Treasuries on a contribution to overall duration but it is not a spread sector; a neutral position in mortgages and an underweight in ... | hard | multiple-choice | fixed income | english | 189 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
357 | english_189_4_r1 | nan | Is Monts’s Statement 2 mostly likely correct | [
"A. No, she is incorrect about corporate bonds",
"B. No, she is incorrect about mortgage-backed securities",
"C. Yes"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. When securities have a contingent claim provision, explicit or implicit, there is an associated risk. In a falling-rate scenario, the manager may have higher coupon payments halted and receive principal, as is the case with mortgage-backed securities. Mortgage-backed securities thus have contingent claims r... | hard | multiple-choice | fixed income | english | 189 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
358 | english_189_5_r1 | nan | The strategy that is most likely to benefit from the environment described by Monts in Statement 3 is to: | [
"A. rotate from consumer non-cyclical to consumer cyclical sectors.",
"B. increase exposure to the crossover sector.",
"C. shift the portfolio’s positions to shorter duration corporate bonds."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. Curve-adjustment trades take place when the portfolio manager expects credit spreads will widen (either overall or in a particular sector). The specific strategy is to shift the portfolio’s exposure to shorten spread duration by selling longer maturity corporate bonds and buying shorter maturity bonds, whic... | hard | multiple-choice | fixed income | english | 189 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
359 | english_189_6_r1 | nan | Is Monts’s Statement 4 most likely correct | [
"A. No, because callable bonds would underperform",
"B. No, because putable bonds would not provide protection",
"C. Yes"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Callable bonds significantly underperform non-callable bonds when interest rates decline because of their negative convexity. When the bond market rallies, callable structures do not fully participate given the upper boundary imposed by call prices. | hard | multiple-choice | fixed income | english | 189 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
360 | english_190_1_r1 | WM’s current allocation to alternative investments is presented in Exhibit 1. Quest states the justification for the allocation: “I believe that the alternative investments we have provide good liquidity and strong portfolio diversification for the remainder of the portfolio, which consists of equities and fixed income... | Quest's justification for the alternative investments in the WM portfolio is most likely correct with respect to | [
"A. private equity.",
"B. real estate.",
"C. hedge funds."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The real estate investment is in REITs, which are publicly traded securities and liquid. REITs can also provide diversification benefits when included in a portfolio of traditional investments, such as stocks and bonds. Private equity investments have low liquidity and provide low diversification benefits. ... | hard | multiple-choice | alternative investments | english | 190 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
361 | english_190_2_r1 | nan | Based on Exhibit 2, which position most likely represents an indirect commodity investment? | [
"A. Position 1",
"B. Position 2",
"C. Position 3"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Position 2 is an indirect commodity investment. The Global Energy Equity Index Fund, although correlated with commodity price movements, is not a direct exposure to commodities because it is made up of stocks. | hard | multiple-choice | alternative investments | english | 190 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
362 | english_190_3_r1 | nan | Based on Exhibits 2 and 3, assuming a 5% increase in prices for each underlying asset in the next 12 months, DPAM will most likely obtain the largest roll return from: | [
"A. Position 5.",
"B. Position 3.",
"C. Position 4."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Position 3 would provide the largest roll return. A long position in backwardation will produce a greater roll return than a position in contango if the price increases. In backwardation, futures prices with a longer time to maturity are lower than the current spot price. In contango, the futures price is g... | hard | multiple-choice | alternative investments | english | 190 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
363 | english_190_4_r1 | nan | Duke's response to Question 1 would least likely include that | [
"A. managed futures have a low cost structure.",
"B. the index fund only earns the risk-free rate minus costs in the long term.",
"C. managed futures take advantage of rising and falling markets."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Managed futures do not have a low cost structure. The compensation arrangement for managed futures is similar to hedge funds. Thus, it is not true to say that they have a low cost structure compared with index funds. | hard | multiple-choice | alternative investments | english | 190 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
364 | english_190_5_r1 | nan | When justifying the inclusion of agricultural commodities in the portfolio, Duke is least likely correct in | [
"A. Justification 1.",
"B. Justification 3.",
"C. Justification 2."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | Answer = A. Agricultural commodities do not necessarily increase the expected portfolio return. Although somewhat less so for agricultural commodities than for energy, one of the principal roles that have been suggested for commodities in portfolios is as an inflation hedge during times of unexpected inflation and as a... | hard | multiple-choice | alternative investments | english | 190 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
365 | english_190_6_r1 | nan | Which of Duke's three due diligence items would more likely be evaluated by an individual investor rather than by an institutional investor | [
"A. Consideration 1",
"B. Consideration 3",
"C. Consideration 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. Consideration 3 would be more likely to be evaluated by an individual investor. Decision risk is the risk of changing strategies at the point of maximum loss. Private clients can be acutely sensitive to positions of loss at stages prior to an investment policy statement's stated time horizon. Although the d... | hard | multiple-choice | alternative investments | english | 190 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
366 | english_191_1_r1 | Beatriz Anton is the chief compliance officer at Long Pond Advisers, an asset management firm catering to institutional investors. Long Pond is not currently GIPS compliant, but Anton would like to market the firm as being compliant as soon as possible. To assist Anton in achieving compliance, she hires Ana Basco from ... | In her statement regarding input data, Basco is least likely correct with respect to: | [
"A. fair value.",
"B. settlement date accounting.",
"C. accrual accounting."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B. The GIPS standards require that firms use trade-date accounting for the purpose of performance measurement for periods beginning 1 January 2005 (Provision I.1.A.5). The principle behind requiring trade-date accounting is to ensure that no significant lag occurs between a trade's execution and its reflection... | hard | multiple-choice | portfolio management | english | 191 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
367 | english_191_2_r1 | nan | Based on Exhibit 1 and the notes following the table, Long Pond is least likely in compliance with GIPS standards with regard to the: | [
"A. measure of internal dispersion.",
"B. length of performance record.",
"C. presentation of 1Q13 performance."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | Answer = B.
Long Pond is required by the GIPS standards to present five years of performance because the composite has been in existence for that period. The mid-cap composite was started on 31 December 2001; therefore, performance for 2008 must be presented. After presenting 5 years of performance, the firm should pr... | hard | multiple-choice | portfolio management | english | 191 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
368 | english_191_3_r1 | nan | Regarding the disclosures contained in Exhibit 1, the GIPS standards would most likely | [
"A. require Columns 3 and 7 and recommend Column 6.",
"B. require Column 6 and recommend Columns 4 and 7.",
"C. require Columns 2 and 5 and recommend Column 1."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | Answer = C. The presentation of firm assets (or percentage of firm assets represented by the composite) is required. Firms are required to present either net-of-fees performance or gross-of-fees performance. If one or the other is presented, then it is recommended that the remaining also be presented. For example, if n... | hard | multiple-choice | portfolio management | english | 191 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
369 | english_192_1_r1 | Rebecca Mayer is an asset management consultant for institutions and high-net-worth individuals. Mayer meets with Sebastian Capara, the newly appointed Investment Committee chairman for the Kinkardeen University Endowment (KUE), a very large tax-exempt fund.
Capara and Mayer review KUE’s current and strategic asset al... | Based on Exhibits 1 and 2, to attempt to profit from the short-term
excess
return forecast, Capara should increase KUE’s portfolio allocation to: | [
"A. developed markets equity and decrease its allocation to infrastructure",
"B. emerging markets equity and decrease its allocation to investment-grade bonds",
"C. developed markets equity and increase its allocation to private real estate equity"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The forecast for expected excess returns is positive for developed markets equity and negative for infrastructure. Therefore, to attempt to profit from the short-term excess return forecast, KUE can overweight developed markets equity and underweight infrastructure. These adjustments to the asset-class we... | hard | multiple-choice | portfolio management | english | 192 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
370 | english_192_2_r1 | nan | Given Koval’s current portfolio and the tax laws of the country in which he
lives, Koval’s portfolio would be more tax efficient if he reallocated his taxable
account to hold more | [
"A. high-yield bonds",
"B. investment-grade bonds",
"C. domestic equities focused on long-term capital gain opportunities."
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. As a general rule, the portion of a taxable asset owner’s assets that are eligible for lower tax rates and deferred capital gains tax treatment should first be allocated to the investor’s taxable accounts. Assets that generate returns mainly from interest income tend to be less tax efficient and in Koval’... | hard | multiple-choice | portfolio management | english | 192 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
371 | english_193_1_r1 | Aline Nuñes, a junior analyst, works in the derivatives research division of an international
securities firm. Nuñes’s supervisor, Cátia Pereira, asks her to conduct an
analysis of various option trading strategies relating to shares of three companies:
IZD, QWY, and XDF. On 1 February, Nuñes gathers selected option pr... | Based on Exhibit 1, Nuñes should expect Strategy 2 to be least profitable if the
share price of IZD at option expiration is: | [
"A. less than €91.26",
"B. between €91.26 and €95.00",
"C. more than €95.00"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. Strategy 2 is a covered call, which is a combination of a long position in shares and a short call option. The breakeven point of Strategy 2 is €91.26, which represents the price per share of €93.93 minus the call premium received of €2.67 per share (S0 – c0). So, at any share price less than €91.26 at op... | hard | multiple-choice | derivatives | english | 193 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
372 | english_193_2_r1 | nan | Based on Exhibit 1, the breakeven share price of Strategy 3 is closest to: | [
"A. €92.25",
"B. €95.61",
"C. €95.82"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. Strategy 3 is a covered call strategy, which is a combination of a long position in shares and a short call option. The breakeven share price for a covered call is the share price minus the call premium received, or S0 – c0. The current share price of IZD is €93.93, and the IZD April €97.50 call premium i... | hard | multiple-choice | derivatives | english | 193 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
373 | english_193_3_r1 | nan | Based on Exhibit 1, the maximum loss per share that would be incurred by implementing Strategy 4 is: | [
"A. €2.99",
"B. €3.99",
"C. unlimited"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Strategy 4 is a protective put position, which is a combination of a long position in shares and a long put option. By purchasing the €25.00 strike put option, Nuñes would be protected from losses at QWY share prices of €25.00 or lower. Thus, the maximum loss per share from Strategy 4 would be the loss of... | hard | multiple-choice | derivatives | english | 193 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
374 | english_193_4_r1 | nan | Based on Exhibit 1, Strategy 5 offers: | [
"A. unlimited upside",
"B. a maximum profit of €2.48 per share",
"C. protection against losses if QWY’s share price falls below €28.14"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Strategy 5 describes a collar, which is a combination of a long position in shares, a long put option, and a short call option. Strategy 5 would require Nuñes to buy 100 QWY shares at the current market price of €28.49 per share. In addition, she would purchase a QWY April €24.00 strike put option contrac... | hard | multiple-choice | derivatives | english | 193 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
375 | english_193_5_r1 | nan | Based on Exhibit 1, the breakeven share price for Strategy 6 is closest to: | [
"A. €22.50",
"B. €28.50",
"C. €33.50"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Strategy 6 is a bear spread, which is a combination of a long put option and a short put option on the same underlying, where the long put has a higher strike price than the short put. In the case of Strategy 6, the April €31.00 put option would be purchased and the April €25.00 put option would be sold. ... | hard | multiple-choice | derivatives | english | 193 | 5 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
376 | english_193_6_r1 | nan | Based on Exhibit 1, the maximum gain per share that could be earned if Strategy 7 is implemented is: | [
"A. €5.74",
"B. €5.76",
"C. unlimited"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Strategy 7 describes a short straddle, which is a combination of a short put option and a short call option, both with the same strike price. The maximum gain is €5.76 per share, which represents the sum of the two option premiums, or c0 + p0 = €2.54 + €3.22 = €5.76. The maximum gain per share is realized... | hard | multiple-choice | derivatives | english | 193 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
377 | english_193_7_r1 | nan | Based on Exhibit 1, the best explanation for Nuñes to implement Strategy 8 would be that, between the February and December expiration dates, she expects the share price of XDF to: | [
"A. decrease",
"B. remain unchanged",
"C. increase"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. Nuñes would implement Strategy 8, which is a long calendar spread, if she expects the XDF share price to increase between the February and December expiration dates. This strategy provides a benefit from the February short call premium to partially offset the cost of the December long call option. Nuñes l... | hard | multiple-choice | derivatives | english | 193 | 7 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
378 | english_194_1_r1 | Stanley Kumar Singh is the risk manager at SKS Asset Management. He works
with individual clients to manage their investment portfolios. One client, Sherman
Hopewell, is worried about how short- term market fluctuations over the next three
months might impact his equity position in Walnut Corporation. Although Hopewell... | Based on Exhibit 1, Strategy 1 is profitable when the share price at expiration is closest to: | [
"A. $63.00",
"B. $65.24",
"C. $69.49"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The straddle strategy consists of simultaneously buying a call
option and buying a put option at the same strike price. The market price for
the $67.50 call option is $1.99, and the market price for the $67.50 put option
is $2.26, for an initial net cost of $4.25 per share. Thus, this straddle position
re... | easy | multiple-choice | derivatives | english | 194 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |
379 | english_194_2_r1 | nan | Based on Exhibit 1, the maximum profit, on a per share basis, from investing in Strategy 2, is closest to: | [
"A. $2.26",
"B. $2.74",
"C. $5.00"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The bull call strategy consists of buying the lower-strike option and selling the higher-strike option. The purchase of the $65 strike call option costs $3.65 per share, and selling the $70 strike call option generates an inflow of $0.91 per share, for an initial net cost of $2.74 per share. At expiration... | easy | multiple-choice | derivatives | english | 194 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
380 | english_194_3_r1 | nan | Based on Exhibit 1, and assuming the market price of Walnut’s shares at expiration is $66, the profit or loss, on a per share basis, from investing in Strategy 3, is closest to: | [
"A. $2.36",
"B. $1.64",
"C. $2.64"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. The bear put spread consists of buying a put option with a high strike price ($70) and selling another put option with a lower strike price ($65). The market price for the $70 strike put option is $3.70, and the market price for the $65 strike put option is $1.34 per share. Thus, the initial net cost of t... | hard | multiple-choice | derivatives | english | 194 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
381 | english_194_4_r1 | nan | Based on the data in Exhibit 1, Singh would advise Tills that the call option with the largest gamma would have a strike price closest to: | [
"A. $ 55.00",
"B. $ 67.50",
"C. $ 80.00"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. The $67.50 call option is approximately at the money because the Walnut share price is currently $67.79. Gamma measures the sensitivity of an option’s delta to a change in the underlying. The largest gamma occurs when options are trading at the money or near expiration, when the deltas of such options mov... | hard | multiple-choice | derivatives | english | 194 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
382 | english_195_1_r1 | Anneke Ngoc is an analyst who works for an international bank, where she advises
high-net-
worth
clients on option strategies. Ngoc prepares for a meeting with a US-based
client, Mani Ahlim.
Ngoc notes that Ahlim recently inherited an account containing a large Brazilian
real (BRL) cash balance. Ahlim intends to use th... | Based on Exhibit 1, the maximum loss per share of Ngoc’s recommended PSÔL
protective put position is: | [
"A. $0.60",
"B. $2.41",
"C. $4.22"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. Ngoc recommends a protective put position with a strike price of $35 using May options. The maximum loss per share on the protective put is calculated as Maximum loss per share of protective put = S0 − X + p0. Maximum loss per share of protective put = $37.41 − $35.00 + $1.81 = $4.22. In summary, with the... | easy | multiple-choice | derivatives | english | 195 | 1 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
383 | english_195_2_r1 | nan | Based on Exhibit 1, the breakeven price per share of Ngoc’s recommended PSÔL protective put position is: | [
"A. $35.60",
"B. $36.81",
"C. $39.22"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. Ngoc recommends a protective put position with a strike price of $35 using May options. The breakeven price per share on the protective put is calculated as Breakeven price per share of protective put = S0 + p0. Breakeven price per share of protective put = $37.41 + $1.81 = $39.22. In summary, Ahlim would... | hard | multiple-choice | derivatives | english | 195 | 2 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
384 | english_195_3_r1 | nan | Based on Exhibit 1, the maximum profit per share of Ngoc’s recommended PSÔL bull call spread is: | [
"A. $2.25",
"B. $7.75",
"C. $12.25"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Ngoc recommends a $40/$50 bull call spread using December options. To construct this spread, Ahlim would buy the $40 call, paying the $6.50 premium, and simultaneously sell the $50 call, receiving a premium of $4.25. The maximum gain or profit of a bull call spread occurs when the stock price reaches the ... | hard | multiple-choice | derivatives | english | 195 | 3 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
385 | english_195_4_r1 | nan | Based on Exhibit 1, the breakeven price per share of Ngoc’s recommended PSÔL bull call spread is: | [
"A. $42.25",
"B. $47.75",
"C. $52.25"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. Ngoc recommends a $40/$50 bull call spread using December options. To construct this spread, Ahlim would buy the $40 call, paying a $6.50 premium, and simultaneously sell the $50 call, receiving a $4.25 premium. The breakeven price per share of a bull call spread is calculated as Breakeven price per share... | hard | multiple-choice | derivatives | english | 195 | 4 | 1 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
386 | english_195_5_r1 | nan | Based on Exhibit 2, the NIFTY 50 Index implied volatility data most likely indicate a: | [
"A. risk reversal",
"B. volatility skew",
"C. volatility smile"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. When the implied volatility decreases for OTM (out-of- the- money) calls relative to ATM (at-the- money) calls and increases for OTM puts relative to ATM puts, a volatility skew exists. Put volatility is higher, rising from 16.44 ATM to 17.72 OTM, likely because of the higher demand for puts to hedge posi... | hard | multiple-choice | derivatives | english | 195 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
387 | english_195_6_r1 | nan | Based on Exhibit 3, which of the following NIFTY 50 Index option strategies should Ngoc recommend to Ahlim? | [
"A. Buy a straddle",
"B. Buy a call option",
"C. Buy a calendar spread"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The research report concludes that the consensus forecast of the implied volatility of index options is too low and anticipates greater-than- expected volatility over the next month. Given the neutral market direction forecast, Ngoc should recommend a long straddle, which entails buying a one-month 11,600... | hard | multiple-choice | derivatives | english | 195 | 6 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
388 | english_196_1_r1 | Guten Investments GmbH, based in Germany and using the EUR as its reporting
currency, is an asset management firm providing investment services for local high
net worth and institutional investors seeking international exposures. The firm invests
in the Swiss, UK, and US markets, after conducting fundamental research i... | Based on Exhibit 1, the domestic-currency return over the last year (measured in EUR terms) was higher than the foreign-currency return for: | [
"A. USD-denominated assets",
"B. GBP-denominated assets",
"C. CHF-denominated assets"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. The domestic-currency
return is a function of the foreign-currency
return and the percentage change of the foreign currency against the domestic
currency. Mathematically, the domestic-currency
return is expressed as:
$R_DC = (1 + R_FC)(1 + R_FX) – 1$
where $R_DC$ is the domestic-currency
return (in percen... | hard | multiple-choice | derivatives | english | 196 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | ||
389 | english_196_2_r1 | nan | Based on Exhibit 2, the currency overlay program most appropriate for Braunt Pensionskasse would: | [
"A. be fully passive",
"B. allow limited directional views",
"C. actively manage foreign exchange as an asset class"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Braunt Pensionskasse provides the manager with limited discretion
in managing the portfolio’s currency risk exposures. This would be most
consistent with allowing the currency overlay manager to take directional views
on future currency movements (within predefined bounds) where the currency
overlay is li... | medium | multiple-choice | derivatives | english | 196 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
390 | english_196_3_r1 | nan | Based on Exhibit 2, the client most likely to benefit from the introduction of an additional overlay manager is: | [
"A. Adele Kastner",
"B. Braunt Pensionskasse",
"C. Franz Trading GmbH"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. The primary performance objective of Franz Trading GmbH is to
add alpha to the portfolio, and thus has given the manager discretion in trading
currencies. This is essentially a “foreign exchange as an asset class” approach.
Braunt Pensionskasse and Kastner have more conservative currency strategies,
and t... | hard | multiple-choice | derivatives | english | 196 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
391 | english_197_1_r1 | Cécile is a junior analyst for an international wealth management firm. Her supervisor,
Margit, asks Cécile to evaluate three fixed-income
funds as part of the firm’s global
fixed-income
offerings. Selected financial data for the funds Aschel, Permot, and
Rosaiso are presented in Exhibit 1. In Cécile’s initial review, ... | Based on Exhibit 1, which fund provides the highest level of protection against inflation for coupon payments? | [
"A. Aschel",
"B. Permot",
"C. Rosaiso"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Permot has the highest percentage of floating-coupon bonds and inflation-linked bonds. Bonds with floating coupons protect interest income from inflation because the reference rate should adjust for inflation. Inflation-linked bonds protect against inflation by paying a return that is directly linked to a... | hard | multiple-choice | fixed income | english | 197 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
392 | english_197_2_r1 | nan | Based on Exhibit 1, the rolling yield of Aschel over a one-year investment horizon is closest to: <image_3> | [
"A. –2.56%",
"B. 0.54%",
"C. 5.66%"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | <ans_image_1> | hard | multiple-choice | fixed income | english | 197 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
393 | english_197_3_r1 | nan | Based on Exhibit 2, the optimal strategy to meet Villash Foundation’s cash needs is the sale of: | [
"A. 100% of Bond 1",
"B. 100% of Bond 2",
"C. 50% of Bond 1 and 50% of Bond 2"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The optimal strategy for Villash is the sale of 100% of Bond 1, which Cécile considers to be overvalued. Because Villash is a tax-exempt foundation, tax considerations are not relevant and Cécile’s investment views drive her trading recommendations. | hard | multiple-choice | fixed income | english | 197 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
394 | english_198_1_r1 | Serena is a risk management specialist with Liability Protection Advisors. Trey, CFO
of Kiest Manufacturing, enlists Serena’s help with three projects. The first project is
to defease some of Kiest’s existing fixed-rate
bonds that are maturing in each of the
next three years. The bonds have no call or put provisions an... | Based on Exhibit 1, Kiest’s liabilities would be classified as: | [
"A. Type I",
"B. Type II",
"C. Type III"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. Type I liabilities have cash outlays with known amounts and timing. The dates and amounts of Kiest’s liabilities are known; therefore, they would be classified as Type I liabilities. | hard | multiple-choice | fixed income | english | 198 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic | |||
395 | english_198_2_r1 | nan | Based on Exhibit 2, the portfolio with the greatest structural risk is: | [
"A. Portfolio A",
"B. Portfolio B",
"C. Portfolio C"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | C | C is correct. Structural risk arises from the design of the duration-matching portfolio. It is reduced by minimizing the dispersion of the bond positions, going from a barbell structure to more of a bullet portfolio that concentrates the component bonds’ durations around the investment horizon. With bond maturities of ... | hard | multiple-choice | fixed income | english | 198 | 2 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
396 | english_198_3_r1 | nan | Which portfolio in Exhibit 2 fails to meet the requirements to achieve immunization for multiple liabilities? | [
"A. Portfolio A",
"B. Portfolio B",
"C. Portfolio C"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | A is correct. The two requirements to achieve immunization for multiple liabilities are for the money duration (or BPV) of the asset and liability to match and for the asset convexity to exceed the convexity of the liability. Although all three portfolios have similar BPVs, Portfolio A is the only portfolio to have a l... | hard | multiple-choice | fixed income | english | 198 | 3 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
397 | english_198_4_r1 | nan | Based on Exhibit 2, relative to Portfolio C, Portfolio B: | [
"A. has higher cash flow reinvestment risk",
"B. is a more desirable portfolio for liquidity management",
"C. provides less protection from yield curve shifts and twists"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | A | B is correct. Portfolio B is a laddered portfolio with maturities spread more or less evenly over the yield curve. A desirable aspect of a laddered portfolio is liquidity management. Because there is always a bond close to redemption, the soon-to- mature bond can provide emergency liquidity needs. Barbell portfolios, s... | hard | multiple-choice | fixed income | english | 198 | 4 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
398 | english_198_5_r1 | nan | The global bond benchmark in Exhibit 3 that is least appropriate for Kiest to use is the: | [
"A. Global Aggregate Index",
"B. Global High Yield Index",
"C. Global Aggregate GDP Weighted Index"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. Kiest has a young workforce and thus a long-term investment horizon. The Global Aggregate and Global Aggregate GDP Weighted Indexes have the highest durations (7.73 and 7.71, respectively) and would be appropriate for this group. Global High Yield is the least appropriate due to its relatively shorter dur... | hard | multiple-choice | fixed income | english | 198 | 5 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
399 | english_199_1_r1 | A Sydney-based
fixed-income
portfolio manager is considering the following
Commonwealth of Australia government bonds traded on the ASX (Australian
Stock Exchange):
<image_1>
The manager is considering portfolio strategies based upon various interest rate
scenarios over the next 12 months. She is considering three lo... | The portfolio alternative with the highest modified duration is the: | [
"A. bullet portfolio",
"B. barbell portfolio",
"C. equally weighted portfolio"
] | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | table | B | B is correct. The modified duration of a fixed-income portfolio is approximately equal to the market value-weighted average of the bonds in the portfolio, so the barbell has a modified duration of 5.049, or (1.922 + 8.175)/2), which is larger than that of either the bullet (4.241) or the equally weighted portfolio (4.7... | easy | multiple-choice | fixed income | english | 199 | 1 | 0 | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | Not supported with pagination yet | release_basic |
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