1. Which of the following is least likely a limitation of classifying companies based on statistical similarities? A. Difficulty in identifying securities with returns that are correlated. B. Falsely excluding a significant relationship. C. Falsely indicating a relationship where none exists. 2. Analyst 1: During recessions, consumers are more likely to defer purchases of products… Read More

1. Which of the following statements is least accurate? A. Investors prefer to invest in putable common shares rather than callable common shares. B. The issuing company is obligated to buy callable common shares at a predetermined price. C. Putable common shares facilitate raising capital because of their appeal to investors over callable common shares.… Read More

1. Tim observed that company XYZ’s share price reacts gradually to the public release of its annual report. With respect to efficient markets, which of the following most likely indicates the market where company XYZ trades? A. The market is weak-form efficient. B. The market is strong-form efficient. C. The market is waiting for new… Read More

1. Modern portfolio theory stresses the correlation between: A. particular portfolio and a benchmark portfolio. B. individual securities within a portfolio. C. individual securities macroeconomic variables.   2. The planning step in the portfolio management process includes: A. deciding the asset allocation between equities, fixed income securities and cash. B. preparation of an investment policy… Read More