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.
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