This quiz works best with JavaScript enabled. Home > Finance > Investments > Investment Management > Investment Management – Quiz 3 🏠 Homepage 📘 Download PDF Books 📕 Premium PDF Books Investment Management Quiz 3 (30 MCQs) Quiz Instructions Select an option to see the correct answer instantly. 1. What are Real Assets? A) Land & Building. B) Gold & Silver. Show Answer Correct Answer: A) Land & Building. 2. The company retains the flexibility to select from various investment strategies and may impose limitations on asset classes for investment. A) TRUE. B) FALSE. Show Answer Correct Answer: A) TRUE. 3. When there's a change in the fair value of an investment in a trading or available-for-sale portfolio, or if there's a permanent decline in the value of a debt security held to maturity, it's important to acknowledge a ..... A) Trading Securities. B) Available for sale. C) Tax Liability. D) Held to Maturity. Show Answer Correct Answer: C) Tax Liability. 4. How is the performance of passive investments typically measured? A) Based on the investor's risk tolerance. B) Comparing current performance to historical performance. C) Against a specific market index or benchmark. D) Against the average returns of actively managed funds. Show Answer Correct Answer: C) Against a specific market index or benchmark. 5. Banks will invest funds even if they don't receive a signed investment authorization form from the company A) FALSE. B) TRUE. Show Answer Correct Answer: A) FALSE. 6. In sustainable investing, what is the primary focus? A) Ignoring long-term environmental and social impacts. B) Supporting investments that promote environmental, social, and economic sustainability. C) Maximizing returns at the expense of long-term sustainability. D) Prioritizing investments in industries with a high environmental impact. Show Answer Correct Answer: B) Supporting investments that promote environmental, social, and economic sustainability. 7. In ethical investing, why is stakeholder engagement important? A) To avoid any interactions with stakeholders to maintain independence. B) To understand and address the concerns of various stakeholders. C) To minimize transparency and accountability. D) To exclude stakeholders' opinions from investment decisions. Show Answer Correct Answer: B) To understand and address the concerns of various stakeholders. 8. Non-normal return distribution is one of the most common features of alternative investments. Which of the following is true? A) A negatively skewed return distribution shows small frequency of very big profits. B) A positively skewed return distribution shows small frequency of very big profits. C) Positively skewed trading strategy will lead to a lot of small gains and a few large losses. D) None of above. Show Answer Correct Answer: B) A positively skewed return distribution shows small frequency of very big profits. 9. Growth investors are typically more comfortable with: A) Dividend-paying stocks with steady returns. B) Stocks with lower potential for capital appreciation. C) Higher volatility in pursuit of capital appreciation. D) Established companies with stable earnings. Show Answer Correct Answer: C) Higher volatility in pursuit of capital appreciation. 10. 23) Classifying investments according to new investments, expansion investments, and investments in renovating existing works is the way to classify investments, according to: A) Investment capital source. B) Economic content. C) Investment capital management function. D) Investment objective. Show Answer Correct Answer: D) Investment objective. 11. It is where corporate and government entities can raise capital and where the first transactions with the new issued securities are performed. A) Primary Market. B) Secondary Market. C) Financial Markets. D) None of the Above. Show Answer Correct Answer: A) Primary Market. 12. Investment is the ..... A) Net addition made to the nation's capital stock. B) Person's commitment to buy a flat. C) Employment funds on assets to earn return. D) Employment of funds on goods and services that are used in production process. Show Answer Correct Answer: C) Employment funds on assets to earn return. 13. A collection of investments like stocks, bonds mutual funds etc., A) Portfolio. B) Wealth. C) Assets. D) Liabilities. Show Answer Correct Answer: A) Portfolio. 14. Long-term growth A) Save. B) Invest. Show Answer Correct Answer: B) Invest. 15. You are considering investing $ 1, 000 in a T-bill that pays 0.05 and a risky portfolio, P, constructed with 2 risky securities, X and Y. The weights of X and Y in P are 0.60 and 0.40, respectively. X has an expected rate of return of 0.14 and variance of 0.01, and Y has an expected rate of return of 0.10 and a variance of 0.0081 If you want to form a portfolio with an expected rate of return of 0.11, what percentages of your money must you invest in the T-bill and P, respectively? A) 0.25; 0.75. B) 0.19; 0.81. C) 0.50; 0.50. D) 0.65; 0.35. Show Answer Correct Answer: B) 0.19; 0.81. 16. What does the sector rotation strategy involve? A) Buying and holding a diversified portfolio for the long term. B) Constantly trading within a single sector for quick profits. C) Shifting investments among different sectors based on economic cycles. D) Ignoring economic indicators and market trends. Show Answer Correct Answer: C) Shifting investments among different sectors based on economic cycles. 17. Ways by which an investor can evaluate his portfolio are A) Self. B) Brokers. C) Portfolio managers. D) All of these. Show Answer Correct Answer: D) All of these. 18. Foreign direct investment in Vietnam takes the following forms: A) Business cooperation on the basis of business cooperation contract. B) Establishment of joint venture company. C) Establish a company with 100% foreign capital. D) All sentences are correct. Show Answer Correct Answer: D) All sentences are correct. 19. The accounting measure of a firm's equity value generated by applying accounting principles to asset and liability acquisitions is called ..... A) Book Value. B) Liquidation Value. C) Market value. D) Statistical value. Show Answer Correct Answer: A) Book Value. 20. Stock A has a beta twice as large as Stock B. So according to CAPM, ..... A) Stock A has an Expected Return twice as large as Stock B; Stock B sometimes outperforms Stock A. B) Stock A has a risk premium twice as large as Stock B; Stock B sometimes outperforms Stock A. C) Stock A has an Expected Return twice as large as Stock B; Stock B sometimes outperforms Stock A. D) Stock A has a risk premium twice as large as Stock B; Stock B sometimes outperforms Stock A. Show Answer Correct Answer: B) Stock A has a risk premium twice as large as Stock B; Stock B sometimes outperforms Stock A. 21. 17) Domestic capital used for investment is formed from: A) This company borrows from another company. B) Borrow from domestic commercial banks. C) Accumulation from within the national economy. D) Foreign loans. Show Answer Correct Answer: C) Accumulation from within the national economy. 22. Jim is a young professional with extra money to save at the end of every month. He is will to take some risk. Which would be the best option? A) SAVINGS ACCOUNT. B) FIXED DEPOSIT. C) SHARES. D) UNIT TRUSTS. Show Answer Correct Answer: C) SHARES. 23. In the short term, savings and investing don't appear to look that different in terms of return. In the long run, investing uses the power of ..... interest to provide superior returns. A) Compound. B) Simple. Show Answer Correct Answer: A) Compound. 24. If an employee is responsible for the physical security of security held by the company, then this person, are also responsible for recording the securities in the accounting records A) TRUE. B) FALSE. Show Answer Correct Answer: B) FALSE. 25. What is a potential benefit of investing in timberland as a real asset? A) Rapid turnover of investments. B) Limited demand for timber products. C) Quick and high capital appreciation. D) Low environmental impact. Show Answer Correct Answer: D) Low environmental impact. 26. What does the risk-return tradeoff suggest about the relationship between risk and return in investments? A) Higher potential returns are generally accompanied by higher risk. B) Lower risk is always associated with higher returns. C) There is no relationship between risk and return. D) Higher risk is always associated with higher returns. Show Answer Correct Answer: A) Higher potential returns are generally accompanied by higher risk. 27. An investment officer might have a preferred bank and may persist in investing with it, even if the bank's rates are not competitive. A) FALSE. B) TRUE. Show Answer Correct Answer: B) TRUE. 28. What is the term for a sudden and significant drop in the overall stock market, often resulting in panic selling? A) Crash. B) Bull market. C) Bear market. D) Correction. Show Answer Correct Answer: A) Crash. 29. Investment has different meaning as per different perspectives. A) False. B) True. Show Answer Correct Answer: B) True. 30. Real investment is ..... A) Investment in plant, machinery etc. B) Investment in mutual funds. C) Investment in shares. D) None of these. Show Answer Correct Answer: A) Investment in plant, machinery etc. ← PreviousNext →Related QuizzesInvestments QuizzesFinance QuizzesInvestment Management Quiz 1Investment Management Quiz 2Investment Management Quiz 4Investment Management Quiz 5Investment Management Quiz 6Investment Management Quiz 7Investment Management Quiz 8Investment Management Quiz 9 🏠 Back to Homepage 📘 Download PDF Books 📕 Premium PDF Books