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Investments 1 (Irvine) Exam 1 Actual Questions And Accurate Detailed Answers. $14.99   Add to cart

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Investments 1 (Irvine) Exam 1 Actual Questions And Accurate Detailed Answers.

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Money Markets - correct answer Short-term securities, less than 1 year to maturity, are highly marketable, liquid, low risk debt securities. Often considered cash equivalents. Nikkei 225 - correct answer ...

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  • August 22, 2024
  • 22
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • INV.
  • INV.
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RealGrades
Investments 1 (Irvine) Exam 1

Money Markets - correct answer Short-term securities, less than 1 year to
maturity, are highly marketable, liquid, low risk debt securities. Often considered cash equivalents.



Nikkei 225 - correct answer Japan



FTSE - correct answer Financial Times Stock Exchange (London)



DAX - correct answer Germany



CAC - correct answer French



OMX - correct answer Sweden



Hang Seng - correct answer Hong Kong



SSE Composite - correct answer Shanghai



KOSPI - correct answer South Korea



EAFE - correct answer Europe, Australia, Far East



MSCI - correct answer Morgan Stanley Capital International

set of indexes



limit order book - correct answer collection of limit orders waiting to be
executed

,Style Box - correct answer graphical representation of an investment's
characteristics

categorizes funds into 9 different categories based on market capitalization (small, medium, large) and
valuation (value, growth, blend)



Alternative Trading Systems (ATS) - correct answer Alternative trading system
is a US and Canadian regulatory term for a non-exchange trading venue that matches buyers and sellers
to find counterparties for transactions. Alternative trading systems are typically regulated as broker-
dealers rather than as exchanges.



Secured Overnight Financing Rate (SOFR) - correct answer is a secured
interbank overnight interest rate and reference rate established as an alternative to LIBOR, which is
published in a number of currencies and underpins financial contracts all over the world.



Cash - correct answer Short-hand for virtually risk-free money market
securities



EAFE Index - correct answer The EAFE Index stands for Europe, Australasia, and
the Far East. It consists of companies of developed countries in these areas - so these are all companies
outside of North America. Investing in an EAFE ETF would give the customer international exposure. The
S&P 500 and Russell 2000 consist of U.S. companies. ADRs are American Depositary Receipts - the way in
which foreign companies list their shares in the U.S. They are not Index Exchange Traded Funds.



Bank Discount Method - correct answer Annualizes the bill's discount from par
based on a 360- day year. Divides by Face Value:



Elliot Spitzer - correct answer - most known for his work as attorney general of
New York

- pursued Wall Street analysts

- cracked down on mutual funds



Interest Rate Sensitivity to Bonds - correct answer Sensitivity of bond prices to
changes in yields increases at a decreasing rate as maturity increases

, Mutual fund timing - correct answer - short-term, in-and-out trades are used
to take advantage of market-moving news. The process is not illegal, but many fund companies —
including Strong — have policies against it because it increases costs and hurts long-term shareholders.

- mutual fund prices are measured as NAVs only once a day

- the are exploitable by day trades if they are allowed to jump into and out of certain trades in a mutual
family

- trading in Japan knowing the US had a positive day



Bond Equivalent Yield BEY - correct answer Annualizes the bill's discount from
par based on a 365- day year. Divides by Bill Price:



Equivalent Annual Yield - correct answer Uses compounding to turn BEY simple
interest rate into a compounded annual rate:



Certificate of Deposit - correct answer Time deposit with a bank

- fixed term issue in denominations larger than $100,000.

-can not be withdrawn on demand

-the bank pays interest and principal only at the end of the fixed term



Commercial Paper - correct answer Short term unsecured debt notes issued by
large companies directly to the public rather than borrowing from banks.

-typically mature within 1 or 2 months

-Trade in secondary mkts, v liquid



Eurodollars - correct answer Dollar denominated deposits at foreign banks or
foreign branches of American banks.

-escape US regulations



Repurchase Agreements - correct answer Short-term borrowing (overnight).
When a dealer sells securities to an investor on an overnight basis with an agreement to buy back those
securities the next day at a slightly higher price

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