Question 1

The __________ equity market had the highest average local currency excess return between 2002-2011.

Accepted Answer

A) Colombian 
B) Norwegian 
C) U.K. 
D) U.S. 
A) Colombian 
B) Norwegian 
C) U.K. 
D) U.S.

Question 2

The manager of Quantitative International Fund uses EAFE as a benchmark.Last year's performance for the fund and the benchmark were as follows:   Calculate Quantitative's stock selection return contribution.

Accepted Answer

A) 1.0% 
B) -1.0% 
C) 3.0% 
D) 0.25% 
A) 1.0% 
B) -1.0% 
C) 3.0% 
D) 0.25%

Question 3

Over the period 2002-2011, most correlations between the U.S.stock index and stock-index portfolios of other countries were

Accepted Answer

A) negative. 
B) positive but less than .9. 
C) approximately zero. 
D) .9 or above. 
E) None of the options 
A) negative. 
B) positive but less than .9. 
C) approximately zero. 
D) .9 or above. 
E) None of the options

Question 4

Assume there is a fixed exchange rate between the Canadian and U.S.dollar.The expected return and standard deviation of return on the U.S.stock market are 18% and 15%, respectively.The expected return and standard deviation on the Canadian stock market are 13% and 20%, respectively.The covariance of returns between the U.S.and Canadian stock markets is 1.5%. If you invested 50% of your money in the Canadian stock market and 50% in the U.S.stock market, the expected return on your portfolio would be

Accepted Answer

A) 12.0%. 
B) 12.5%. 
C) 13.0%. 
D) 15.5%. 
A) 12.0%. 
B) 12.5%. 
C) 13.0%. 
D) 15.5%.

Question 5

Discuss performance evaluation of international portfolio managers in terms of potential sources of abnormal returns.

Accepted Answer

The following factors may be measured to

Question 6

The EAFE is

Accepted Answer

A) the East Asia Foreign Equity index. 
B) the Economic Advisor's Foreign Estimator index. 
C) the European and Asian Foreign Equity index. 
D) the European, Asian, French Equity index. 
E) the European, Australian, Far East index. 
A) the East Asia Foreign Equity index. 
B) the Economic Advisor's Foreign Estimator index. 
C) the European and Asian Foreign Equity index. 
D) the European, Asian, French Equity index. 
E) the European, Australian, Far East index.

Question 7

Shares of several foreign firms are traded in the U.S.markets in the form of

Accepted Answer

A) ADRs. 
B) ECUs. 
C) single-country funds. 
D) All of the options 
E) None of the options 
A) ADRs. 
B) ECUs. 
C) single-country funds. 
D) All of the options 
E) None of the options

Question 8

"ADRs" stands for ___________ and "WEBS" stands for ____________.

Accepted Answer

A) additional dollar returns; weekly equity and bond survey 
B) additional daily returns; world equity and bond survey 
C) American dollar returns; world equity and bond statistics 
D) American depository receipts; world equity benchmark shares 
E) adjusted dollar returns; weighted equity benchmark shares 
A) additional dollar returns; weekly equity and bond survey 
B) additional daily returns; world equity and bond survey 
C) American dollar returns; world equity and bond statistics 
D) American depository receipts; world equity benchmark shares 
E) adjusted dollar returns; weighted equity benchmark shares

Question 9

Discuss some of the factors that might be included in a multifactor model of security returns in an international application of arbitrage pricing theory (APT).

Accepted Answer

Some of the factors that might be consid

Question 10

The present exchange rate is C$ = U.S.$0.78.The 1-year future rate is C$ = U.S.$0.76.The yield on a 1-year U.S.bill is 4%.A yield of __________ on a 1-year Canadian bill will make investor indifferent between investing in the U.S.bill and the Canadian bill.

Accepted Answer

A) 2.4% 
B) 1.3% 
C) 6.4% 
D) 6.7% 
E) None of the options 
A) 2.4% 
B) 1.3% 
C) 6.4% 
D) 6.7% 
E) None of the options

Question 11

Using the S&P 500 portfolio as a proxy of the market portfolio

Accepted Answer

A) is appropriate because U.S.securities represent more than 60% of world equities. 
B) is appropriate because most U.S.investors are primarily interested in U.S.securities. 
C) is appropriate because most U.S.and non-U.S.investors are primarily interested in U.S.securities. 
D) is inappropriate because U.S.securities make up less than 40% of world equities. 
E) is inappropriate because the average U.S.investor has less than 20% of her portfolio in non-U.S.equities. 
A) is appropriate because U.S.securities represent more than 60% of world equities. 
B) is appropriate because most U.S.investors are primarily interested in U.S.securities. 
C) is appropriate because most U.S.and non-U.S.investors are primarily interested in U.S.securities. 
D) is inappropriate because U.S.securities make up less than 40% of world equities. 
E) is inappropriate because the average U.S.investor has less than 20% of her portfolio in non-U.S.equities.

Question 12

In 2011, the U.S.equity market represented __________ of the world equity market.

Accepted Answer

A) 19% 
B) 60% 
C) 43% 
D) 36% 
A) 19% 
B) 60% 
C) 43% 
D) 36%

The __________ equity market had the highest average local currency excess return between 2002-2011.

The manager of Quantitative International Fund uses EAFE as a benchmark.Last year's performance for the fund and the benchmark were as follows: Calculate Quantitative's stock selection return contribution.

Over the period 2002-2011, most correlations between the U.S.stock index and stock-index portfolios of other countries were

Discuss performance evaluation of international portfolio managers in terms of potential sources of abnormal returns.

The EAFE is

Shares of several foreign firms are traded in the U.S.markets in the form of

"ADRs" stands for _ and "WEBS" stands for __.

Discuss some of the factors that might be included in a multifactor model of security returns in an international application of arbitrage pricing theory (APT).

The present exchange rate is C$ = U.S.$0.78.The 1-year future rate is C$ = U.S.$0.76.The yield on a 1-year U.S.bill is 4%.A yield of __________ on a 1-year Canadian bill will make investor indifferent between investing in the U.S.bill and the Canadian bill.

Using the S&P 500 portfolio as a proxy of the market portfolio

In 2011, the U.S.equity market represented __________ of the world equity market.

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

Exam 25: International Diversification

The __________ equity market had the highest average local currency excess return between 2002-2011.

The manager of Quantitative International Fund uses EAFE as a benchmark.Last year's performance for the fund and the benchmark were as follows: Calculate Quantitative's stock selection return contribution.

Over the period 2002-2011, most correlations between the U.S.stock index and stock-index portfolios of other countries were

Discuss performance evaluation of international portfolio managers in terms of potential sources of abnormal returns.

The EAFE is

Shares of several foreign firms are traded in the U.S.markets in the form of

"ADRs" stands for ___________ and "WEBS" stands for ____________.

Discuss some of the factors that might be included in a multifactor model of security returns in an international application of arbitrage pricing theory (APT).

The present exchange rate is C$ = U.S.$0.78.The 1-year future rate is C$ = U.S.$0.76.The yield on a 1-year U.S.bill is 4%.A yield of __________ on a 1-year Canadian bill will make investor indifferent between investing in the U.S.bill and the Canadian bill.

Using the S&P 500 portfolio as a proxy of the market portfolio

In 2011, the U.S.equity market represented __________ of the world equity market.

The Investment Environment

Asset Classes and Financial Instruments

How Securities Are Traded

Mutual Funds and Other Investment Companies

Risk, Return, and the Historical Record

Capital Allocation to Risky Assets

Optimal Risky Portfolios

Index Models

The Capital Asset Pricing Model

Arbitrage Pricing Theory and Multifactor Models of Risk and Return

The Efficient Market Hypothesis

Behavioral Finance and Technical Analysis

Empirical Evidence on Security Returns

Bond Prices and Yields

The Term Structure of Interest Rates

Managing Bond Portfolios

Macroeconomic and Industry Analysis

Equity Valuation Models

Financial Statement Analysis

Options Markets: Introduction

Option Valuation

Futures Markets

Futures, Swaps, and Risk Management

Portfolio Performance Evaluation

Hedge Funds

The Theory of Active Portfolio Management

Investment Policy and the Framework of the Cfa Institute

Filters

"ADRs" stands for _ and "WEBS" stands for __.