Investment Theory and Portfolio Development - Review Questions 13 - 18
- One may describe the information ratio as follows:
- It measures risk adjusted performance of a manager using beta as the adjustment for risk.
- It is used to ascertain the ability of an investment manager to add risk-adjusted return.
- It is designed to measure a manager's performance adjusted for total risk.
- Either a or c.
- An investor's purchase of municipal bonds would be prudent when:
- The investor seeks tax-free income.
- The investor's marginal tax rate is high.
- The investor is looking to avoid the intangibles tax.
- The investor wants to increase income.
- Contrarian indicators include all of the following, except:
- CBOE Put/Call Ratio.
- Odd Lot Short Sales Theory.
- Mutual fund cash position.
- Relative strength.
- Challenges to technical analysis exclude all of the following, except:
- Pure expectations hypothesis.
- The Laffer Curve.
- Supply side economics.
- The Efficient Market Hypothesis (EMH).
- Profitability Ratios include all of the following, except:
- Dividend payout ratio.
- Inventory turnover.
- Return on equity.
- Return on assets.
- Elements of fiscal policy designed to tighten money supply exclude all of the following, except:
- Purchase government securities.
- Raise taxes.
- Increase deficit spending.
- Raise the discount rate.
ProfessionalsWe look at the efficient market hypothesis and see if it holds up.
Active Trading FundamentalsDeciding whether it's possible to attain above-average returns requires an understanding of EMH.
EconomicsThe Laffer Curve is a graph that shows how changes in tax rates can influence economic growth.
InvestingRatio analysis is the use of quantitative analysis of financial information in a company’s financial statements. The analysis is done by comparing line items in a company’s financial ...
TaxesFeel like the government always has its hand in your pocket? Learn the theory behind how it decides how much to take.
Fundamental AnalysisThere are many types of efficiency ratios, but all measure how well a company utilizes its resources to make a profit. Business managers use these ratios to determine how well they are operating ...
ProfessionalsCFA Level 1 - Implications of Efficient Markets. Learn how the efficient market hypothesis impacts technical analysis, portfolio management and index funds.
Investing BasicsMake informed decisions about your investments with these easy equations.
Invented by Arthur Laffer, this curve shows the relationship ...
The premise that asset prices are efficient, to the extent that ...
A class of EMH (Efficient Market Hypothesis) that implies all ...
A process by which an analyst tests a statistical hypothesis. ...
Accounting ratios that measure a firm's ability to convert different ...
Ratios that are typically used to analyze how well a company ...
Learn how the information ratio is calculated as a risk-adjusted measure of performance, and understand how it seeks to differentiate ... Read Answer >>
Learn about efficiency ratios, what they measure, how to calculate commonly used efficiency ratios and how to interpret these ... Read Answer >>
The put-call ratio is a popular tool specifically designed to help individual investors gauge the overall sentiment (mood) ... Read Answer >>
Learn which ratios are used in fundamental analysis. Find out how analysts measure company performance and financial health ... Read Answer >>
Learn about efficiency and profitability ratios, what these ratios measure and the main difference between efficiency and ... Read Answer >>
Find out how a fund manager can raise or lower a fund's turnover ratio, including how to interpret this metric and what it ... Read Answer >>