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Blackrock Knowledge Check- Fitch Learning With Complete Solutions 2024
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Blackrock Knowledge Check- Fitch Learning With Complete Solutions 2024
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Blackrock Knowledge Check- Fitch LearningWith Complete Solutions 2024
Relative to traditional investments, alternative investments are least likely to be characterized by:
a. high levels of transparency
b. limited historical data
c. high levels of secondary market liquidity Answer: c.
An effective marketing strategy for an alternative asset fund is likely to highlight:
a. low management fees compared to more traditional funds
b. high allocations to passive benchmarks within the fund
c. potential diversification between benefits of alternative assets Answer: c.
relative to traditional investments, alternative investments are least likely to be characterized by:
a. high levels of transparency
b. limited historical return data
c. significant restrictions on redemptions Answer: a.
examples of exchange-traded derivatives include:
a. S&P 500 futures and US equity options
b. Bespoke commodity forward contracts
c. options on interest rate swaps (swaptions) Answer: a.
compared with the underlying spot market, derivative markets are more likely to have:
a. greater liquidity
,b. higher transaction costs
c. higher capital requirements Answer: a.
if the net cost of carry of an asset is negative, then the price of a forward contract on that asset is most
likely:
a. lower than if the net cost of carry was zero
b. the same as if the net cost of carry was zero
c. higher than if the net cost of carry was zero Answer: c.
A perpetual preferred stock makes its first quarterly dividend payment of $2.75 in five quarters. If the
required annual rate of return is 3% compounded quarterly, the stock's present value is closest to:
a. $81
b. $89
c. $103 Answer: b. $89
2.75/ .0303 = 91 present value of 91/ 1.0303 = 89 the dividend or coupon is not received until 1 year
later
Given a stated annual interest rate of 2% compounded quarterly, the level amount that, deposited
quarterly, will grow to $25,000 at the end of 20 years is closest to:
a. $255
b. $625
c. $1029 Answer: a.
Spanish and German bonds have return standard deviations of 0.72 and 0.48, respectively. If the
correlation between the two bonds is 0.42, the covariance of returns is closest to:
0.145.
, 0.345.
0.781. Answer: 0.145.
As the expansion phase of the business cycle advances from early stage to late stage, businesses most
likely experience an increase in:
New investment opportunities.
Organic growth in sales.
Labor costs. Answer: Labor costs.
Normal profit is best described as:
Zero economic profit.
Total revenue minus all explicit costs.
The sum of accounting profit plus economic profit. Answer: Zero economic profit.
Which of the following conditions is least likely to increase a country's GDP?
An increase in net exports.
Increased investment in capital goods.
Increased government transfer payments. Answer: Increased government transfer payments.
The cost of equity is equal to the:
Expected market return.
Rate of return required by stockholders.
Cost of retained earnings plus dividends Answer: Rate of return required by stockholders.
A $5.2 million investment will result in the cash flows shown below:
year. Year end cash flow
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