Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) \(\begin{array}{c} \text { Real Returns } \\ \begin{array}{lc} \text {INVESTMENT } & \text { REAL ANNUAL RETURN } \\ \hline\text { Large company stock } & 6.50 \% \\ \text { Small capitalization stock } & 8.60 \% \\ \text { Long-term corporate bonds } & 3.60 \% \\ \text { Long-term government bonds } & 2.80 \% \\ \text { Canadian Treasury bills } & 1.03 \% \end{array}\end{array}\) The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the long term Treasury bond nominal return?

A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32% A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32%

Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) \(\begin{array}{c} \text { Real Returns } \\ \begin{array}{lc} \text {INVESTMENT } & \text { REAL ANNUAL RETURN } \\ \hline\text { Large company stock } & 6.50 \% \\ \text { Small capitalization stock } & 8.60 \% \\ \text { Long-term corporate bonds } & 3.60 \% \\ \text { Long-term government bonds } & 2.80 \% \\ \text { Canadian Treasury bills } & 1.03 \% \end{array}\end{array}\) The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the small capitalization stock nominal return?

A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32% A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32%

Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) \(\begin{array}{c} \text { Real Returns } \\ \begin{array}{lc} \text {INVESTMENT } & \text { REAL ANNUAL RETURN } \\ \hline\text { Large company stock } & 6.50 \% \\ \text { Small capitalization stock } & 8.60 \% \\ \text { Long-term corporate bonds } & 3.60 \% \\ \text { Long-term government bonds } & 2.80 \% \\ \text { Canadian Treasury bills } & 1.03 \% \end{array}\end{array}\) The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the large company stock nominal return?

A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32% A) 3.56% B) 5.37% C) 6.19% D) 9.16% E) 11.32%

Exam 3: Selecting Investments in a Global Market

Certificates of ownership issued by a U.S. bank that represent indirect ownership of a certain number of shares of a specific foreign firm on deposit in a bank in the firm's home country are known as:

(Multiple Choice)

4.9/5

(66)

Question 41

Convertible bonds are bonds

(Multiple Choice)

4.9/5

(81)

Question 42

Which of the following are reasons that Canadian investors should consider foreign markets when constructing global portfolios?

(Multiple Choice)

4.8/5

(90)

Question 43

A call option is usually issued in conjunction with convertible bonds.

(True/False)

4.7/5

(84)

Question 44

Which of the following is not an international bond?

(Multiple Choice)

4.9/5

(77)

Question 45

What range of returns would an investor expect to achieve 99% of the time on an investment with an expected return of 11% and a standard deviation of 16%?

(Multiple Choice)

4.8/5

(74)

Question 46

Municipal bond nominal yields are generally below comparable taxable bond yields.

(True/False)

4.9/5

(88)

Question 47

Subordinated bondholders have claim to the assets of the firm only after the firm has satisfied the claims of all senior secured and debenture bondholders.

(True/False)

4.9/5

(89)

Question 48

Which of the following is a type of investment company?

(Multiple Choice)

4.9/5

(74)

Question 49

Which of the following is not considered a fixed income investment?

(Multiple Choice)

4.9/5

(88)

Question 50

Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Real Returns INVESTMENT REAL ANNUAL RETURN Large company stock 6.50\% Small capitalization stock 8.60\% Long-term corporate bonds 3.60\% Long-term government bonds 2.80\% Canadian Treasury bills 1.03\% The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the long term Treasury bond nominal return?

(Multiple Choice)

4.8/5

(83)

Question 51

The U.S. equity and bond markets have grown in terms of their relative size of the world equity and bond market.

(True/False)

4.8/5

(84)

Question 52

A debenture is an option issued by a corporation that gives the holder the right to acquire common stock from the issuing firm at a specified price within a designated period of time.

(True/False)

4.8/5

(73)

Question 53

Senior secured bonds are

(Multiple Choice)

4.8/5

(73)

Question 54

Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Real Returns INVESTMENT REAL ANNUAL RETURN Large company stock 6.50\% Small capitalization stock 8.60\% Long-term corporate bonds 3.60\% Long-term government bonds 2.80\% Canadian Treasury bills 1.03\% The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the small capitalization stock nominal return?

(Multiple Choice)

4.8/5

(75)

Question 55

For a Canadian-based investor, a weaker dollar means that overall dollar based returns on overseas security investment will be higher because

(Multiple Choice)

4.8/5

(81)

Question 56

Income bonds are considered as safe as debentures because they pay higher rates of interest.

(True/False)

4.8/5

(87)

Question 57

What is the original maturity of a Canadian Treasury note?

(Multiple Choice)

4.8/5

(73)

Question 58

Exhibit 3-2 USE THE FOLLOWING INFORMATION FOR THE NEXT PROBLEM(S) Real Returns INVESTMENT REAL ANNUAL RETURN Large company stock 6.50\% Small capitalization stock 8.60\% Long-term corporate bonds 3.60\% Long-term government bonds 2.80\% Canadian Treasury bills 1.03\% The annual rate of inflation is 2.5% -Refer to Exhibit 3-2. What is the large company stock nominal return?

(Multiple Choice)

4.8/5

(76)

Question 59

A return series has an arithmetic mean of 10.5% and standard deviation of 13%. Assuming the returns are normally distributed, what is the range of returns that an investor would expect to receive 95% of the time?

(Multiple Choice)

4.8/5

(86)

Question 60

Certificates of ownership issued by a U.S. bank that represent indirect ownership of a certain number of shares of a specific foreign firm on deposit in a bank in the firm's home country are known as:

Convertible bonds are bonds

Which of the following are reasons that Canadian investors should consider foreign markets when constructing global portfolios?

A call option is usually issued in conjunction with convertible bonds.

Which of the following is not an international bond?

What range of returns would an investor expect to achieve 99% of the time on an investment with an expected return of 11% and a standard deviation of 16%?

Municipal bond nominal yields are generally below comparable taxable bond yields.

Subordinated bondholders have claim to the assets of the firm only after the firm has satisfied the claims of all senior secured and debenture bondholders.

Which of the following is a type of investment company?

Which of the following is not considered a fixed income investment?

The U.S. equity and bond markets have grown in terms of their relative size of the world equity and bond market.

A debenture is an option issued by a corporation that gives the holder the right to acquire common stock from the issuing firm at a specified price within a designated period of time.

Senior secured bonds are

For a Canadian-based investor, a weaker dollar means that overall dollar based returns on overseas security investment will be higher because

Income bonds are considered as safe as debentures because they pay higher rates of interest.

What is the original maturity of a Canadian Treasury note?

A return series has an arithmetic mean of 10.5% and standard deviation of 13%. Assuming the returns are normally distributed, what is the range of returns that an investor would expect to receive 95% of the time?

The Investment Setting

The Asset Allocation Decision

Securities Markets and the Economy

Efficient Capital Markets

An Introduction to Portfolio Management

Asset Pricing Models: Capm and Apt

Economic and Industry Analysis

Company Analysis and Stock Valuation

Technical Analysis

Bond Fundamentals

The Analysis and Valuation of Bonds

An Introduction to Derivative Markets and Securities

Derivatives: Analysis and Valuation

Equity Portfolio Management Strategies

Bond Portfolio Management Strategies

Professional Money Management, Alternative Assets, and Industry Ethics

Evaluation of Portfolio Performance

Analysis of Financial Statements

An Introduction to Security Valuation

Web Appendix: A Review of Statistics and the Security Market Line

Web Appendix: A Review of Statistics and the Security Market Line

Appendix: Objectives and Constraints of Institutional Investors

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