CHAPTER 2
THE ASSET ALLOCATION DECISION
TRUE/FALSE QUESTIONS
(t) 1 Experts suggest life insurance coverage should be ven to ten times an individual's annual salary.
(f) 2 Term life insurance provides both a death benefit and a savings plan.
(f) 3 Most experts recommend a cash rerve of at least one year's worth of living expens.
(f) 4 The spending pha occurs when investors are relatively young.
(t) 5 The gifting pha is similar to, and may be concurrent with, the spending pha.
(t) 6 Long-term, high-priority goals include some form of financial independence.
(f) 7 It is not a good idea to get too specific when constructing your policy statement.
(t) 8 Ast allocation is the process of dividing funds into different class of asts.
(f) 9 The typical investor's goals rarely change during his/her lifetime.
(f) 10 Individual curity lection is far more important than the ast allocation decision.
(f) 11 Return is the only important consideration when establishing investment objectives.
(f) 12 In constructing the portfolio, the manager should maximize the investor's risk level.
(f) 13 Risk tolerance is exclusively a function of an individual’s psychological makeup.
(f) 14 An appropriate investment objective for a typical 25-year-old investor is a low-risk strategy, such as capital prervation or current income.
(t) 15 Investment planning is complicated by the tax code.
添加图片
麦杆菊(t) 16 Average tax rate is defined as total tax payment divided by total income.
(f) 17 The regular IRA, when compared to the Roth IRA, will consistently given an investor more after tax dollars at the end of an assumed 20-year time horizon.
(f) 18 The portfolio mixes of institutional investors around the world are approximately the same.
MULTIPLE CHOICE QUESTIONS
(e) 1 The current outlay of money to guard against a potentially large future loss is commonly known as
a) Ast management.
b) Portfolio management.
c) Minimizing risk.
d) Loss control.
e) Insurance.
forests(d) 2 __________ insurance provides death benefits only.
a) Term
b) Variable rate
c) Extendible indemnity
d) Full term
e)Life
(a) 3 ____________ phra is the stage when investors in their early-to-middle earning years attempt to accumulate asts to satisfy near-term needs, e.g., children's education or down payment on a home.
a) Accumulation
b) Spending
c) Gifting
d) Consolidation
e) Divestiture
(a) 4 Which of the following is not a life cycle pha?
a) Discovery pha
b) Accumulation pha乌鸡怎么炖
c) Consolidation pha
d) Spending pha
微信图片头像
e) Gifting pha
(e) 5 Which of the following is not a step in the portfolio management process?
a) Develop a policy statement.
b) Study current financial and economic conditions.
c) Construct the portfolio.
d) Monitor investor's needs and market conditions.
e) Sell all asts and reinvestment proceeds at least once a year.
(b) 6 The first step in the investment process is the development of a(n)
a) Objective statement.
b) Policy statement.
c) Financial statement.
d) Statement of cash needs.
呼兰河传读书笔记摘抄e)Statement of cash flows.
(e) 7 Which of the following is not considered to be an investment objective?
a) Capital prervation
b) Capital appreciation
c) Current income
d) Total return
e) None of the above (that is, all are considered investment objectives)
(d) 8 must be stated in terms of expected returns and risk. An investor's tolerance for risk must be established before returns objectives can be stated.
a) Investment requirements
b) Portfolio goals
c) Investment rewards
d) Investment objectives
e)Portfolio objectives
哪里有金矿
(b) 9 _______________ is an appropriate objective for investors who want their portfolio to grow in real terms, i.e., exceed the rate of inflation.
a) Capital prervation
b) Capital appreciation
c) Portfolio growth
d) Value additivity
e) Nominal prervation
(a) 10 ___________ refer(s) to the ability to convert asts to cash quickly and at a fair market price and often increa(s) as one approaches the later stages of the investment life cycle.
a) Liquidity needs
b) Time horizons
c) Liquidation values
设身处地 d) Liquidation esntials
e)Capital liquidations
(b) 11 The policy statement may include a __________ against which a portfolio's or portfolio manager's performance can be measured.
a) Milestone
b) Benchmark
c) Landmark
d) Reference point
e)Market pair
(e) 12 Ast allocation is
a) The process of dividing funds into ast class.
