Investment Strategies - Review Questions 6 - 11
- With respect to market timing,
- The potential for gain is unlimited.
- It is the single greatest determinant of a portfolio's performance.
- It is possibly quite expensive.
- Some have dubbed it 'closet rebalancing' of a portfolio.
- Possible disadvantages of a buy and hold strategy include:
- It is expensive.
- It subjects the portfolio to the risk of a single asset class, inadvertently driving that portfolio's risk and return.
- Implementation is complicated.
- The strategy is dynamic.
- An investor looking to hedge downside risk and preserve gain in a long stock position whilst minimizing transaction cost would pursue which of the following strategies:
- A debit spread.
- A strap.
- A zero-cost collar.
- A short straddle.
- In a long margin account, the investor's initial margin is:
- The debit balance/.75
- None of the foregoing.
- In a rising market, a short seller's loss is limited to:
- the amount borrowed.
- the decline in price.
- none of the above.
- DRIP plans entail which of the following risks:
- transaction costs could erode returns significantly.
- the investor may not be able to identify stocks with a history of significant dividend payouts.
- the strategy is complex.
- there are tax implications.
Options & FuturesFutures have a number of advantages over options such as fixed upfront trading costs, lack of time decay and liquidity.
Products and InvestmentsThe 10 steps outlined here are essential to the creation of a new financial product.
ProfessionalsHere's an inside look at the workdays of two experienced CPAs, to give you an idea of what it might be like to pursue a career as a public accountant.
ProfessionalsThere’s no typical day in the life of a public accountant, but one accountant’s experience may shed some light on what the career entails.
Saving and SpendingRetirees who don't want to deplete their nest eggs during a bear market should make sure to do the following.
Mutual Funds & ETFsGet a brief overview of Fidelity's seven target risk funds, with a description of each fund's asset allocation and expense ratio.
Investing NewsWarning signs have started to emerge that point to a potentially dismal 2016 for the U.S. economy.
MarketsAlgorithmic HFT has a number of risks, and it also can amplify systemic risk because of its propensity to intensify market volatility.
Mutual Funds & ETFsExplore analyses of the top three Invesco mutual funds for retirement diversification in 2016, and learn about the characteristics of these target-date funds.
Investing BasicsHedging risk is always a good idea. Here is how sophisticated investors go about it.
A modification of the Sharpe ratio that differentiates harmful ...
The excess return that investing in the stock market provides ...
The amount of risk that an insurance company retains after subtracting ...
Coverage that provides financial protection to investors, financial ...
The maximum loss from a peak to a trough of a portfolio, before ...
The absolute level of a fund's investments.
Different types of orders allow you to be more specific about how you'd like your broker to fulfill your trades. When you ... Read Full Answer >>
Secured loans are better for the borrower than unsecured loans because the loan terms are more agreeable. Often, the interest ... Read Full Answer >>
Out of the 2,800 mutual funds that Morningstar, Inc., the leading provider of independent investment research in North America, ... Read Full Answer >>
Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
Mutual funds have become an incredibly popular option for a wide variety of investors. This is primarily due to the automatic ... Read Full Answer >>
While your auto insurance company cannot pull your full motor vehicle report, or MVR, it does pull a record summary that ... Read Full Answer >>