1. Hedge funds, as a rule, are least susceptible to:
    1. Inflation risk
    2. Liquidity risk
    3. Reinvestment risk
    4. Capital impairment
  2. Fixed income securities in high yield funds are most subject to:
    1. Default risk
    2. Purchasing power risk
    3. Business risk
    4. Interest rate risk
  3. Arrange the following items in terms of their susceptibility to inflation risk, from least to greatest.
    1. A 4 year treasury note
    2. Commercial paper
    3. Emerging market debt mutual fund with an average maturity of 5 years
    4. Privately placed 7.3 year duration corporate bond
    5. Growth and income mutual fund
    1. II, I, III, V, IV
    2. V, IV, III, I, II
    3. V, III, II, I, IV
    4. V, III, IV, I, II
  4. Risks associated with private equity include:
    1. Capital impairment
    2. Business risk
    3. Market risk
    4. Total risk
    1. I
    2. I, IV
    3. III, IV
    4. I, II


Answers and Explanations

Related Articles
  1. Professionals

    Tips for Taking the CFA Exam: Part 1

    Peter Mackey, head of exam development for the CFA Institute, shares his tips for taking the CFA level I, II and III exams.
  2. Financial Advisor

    Tips for Taking the CFA Exam: Part 2

    Peter Mackey, head of exam development for the CFA Institute, shares his tips for passing the CFA level I, II and III exams.
  3. Managing Wealth

    Understanding The Basel III International Regulations

    The Basel III regulations mark a drastic reform in international banking. But how do they impact the future's investment landscape?
  4. Professionals

    What To Expect On The CFA Level III Exam

    The Chartered Financial Analyst Level III exam, which is only offered in June, is the last in the series of three tests that CFA candidates must pass.
  5. Trading

    Introduction To Level II Quotes

    Level II quotes show a ranked list of the best bid and ask prices from each market participant, providing detailed insight into a stock’s price action.
  6. Managing Wealth

    Risk Management Framework (RMF): An Overview

    A company must identify the type of risks it is taking, as well as measure, report on, and set systems in place to manage and limit, those risks.
  7. Personal Finance

    Failing To Build Wealth Despite Making Big Bucks?

    Lifestyle inflation occurs when 'you earn more, you spend more', and your spending ends up matching your earnings. Thus, no savings remain.
  8. Markets

    What is Basel III?

    The purpose of the Basel accords is to improve the worldwide bank regulatory framework.
  9. Markets

    What is Basel II?

    Basel II refers to the second of a set of international banking rules passed by the Basel Committee on Banking Supervision.
  10. Managing Wealth

    Risk and Diversification: Different Types of Risk

    Let's take a look at the two basic types of risk: Systematic Risk - Systematic risk influences a large number of assets. A significant political event, for example, could affect several of the ...
Trading Center