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AAMS Exam Practice Questions and Answers (100% Pass)
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©PREP4EXAMS@2024 [REAL EXAM DUMPS] Tuesday, July 23, 2024 10:52 AMAAMS Exam Practice Questions and Answers (100% Pass)
The Asset Management Process is... - ✔️✔️Gather data, Establish goals, Analyze information,
Make recommendations and implement, monitor performance
Required Rate of return formula = - ✔️✔️(e)r = Rf + (Rm-Rf)Bp
What is Excess Return ? - ✔️✔️Total Portfolio Return - Risk Free Rate
Explain Jensen performance ratio? - ✔️✔️This measure of performance is a measure of absolute
risk, meaning it can be used as a stand-alone measure as apposed to a relative measure (one that
compares)
Treynor ratio uses what to measure risk? - ✔️✔️beta
Sharpe ratio uses what to measure risk? - ✔️✔️Standard Deviation
Treynor formula? - ✔️✔️Ti = Excess return / portfolio beta
Sharpe ratio formula? - ✔️✔️= Total Portfolio return - Rfr / standard deviation
The Treynor ratio output shows what...? - ✔️✔️It shows how much return each fund generated per
one unit of risk
Treynor measure is only appropriate for what type of portfolios? and why? - ✔️✔️fully diversified
portfolios; because it uses beta as its measure of risk, and beta is a systemic type of risk (market
risk)
excess return is what? - ✔️✔️total portfolio return - Rfr
T or F: Indexes assume that all dividends and distributions are reinvested. - ✔️✔️true
What is risk in terms of investing? - ✔️✔️The degree of uncertainty associated with return of an
asset.
Required rate of return formula is AKA as what...? - ✔️✔️CAPM pricing model
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, ©PREP4EXAMS@2024 [REAL EXAM DUMPS] Tuesday, July 23, 2024 10:52 AM
What are the three key elements of an investment strategy? - ✔️✔️an identifiable goal, a method
to attain that goal, and the competencies and resources to sustain the strategy
What are the three categories of EMH? - ✔️✔️Weak Form, Semi-Strong form, and the strong
form.
Does the efficient market hypothesis use technical analysis? - ✔️✔️No
T or F: Fundamental analysis is said to provide superior returns in weak-form hypothesis. -
✔️✔️True
What does semi-strong form EMH imply? - ✔️✔️Implies that only private (inside) information
can provide superior returns
What does strong-form EMH imply? - ✔️✔️that nothing works to achieve superior returns
Which industries do well in a recession? - ✔️✔️Consumer staples, utilities (tobacco, liquor, etc.)
What is the Brinson study? - ✔️✔️It is a study that says to give more attention to Asset Allocation,
and less attention to securities selection and market timing
U.S. dollar-denominated CD issued by foreign branches of major U.S. and foreign commercial
banks....what is this called? - ✔️✔️A Eurodollar CD
True or False.
Small company stocks have generally outperformed all other asset classes over the long term
according to Ibbotson and other major tracking data. - ✔️✔️true
What type of strategy does Tactical Asset Allocation use? - ✔️✔️Tactical asset allocation uses
securities selection and market timing techniques to shift assets from those perceived to be
overvalued to those that are perceived to be undervalued.
True or False: MM mutual funds invest in corporate bonds. - ✔️✔️false. Corporate Bonds are not
safe from default risk.
A bond's duration will increase or decrease with increases in market interest rates? - ✔️✔️decrease
because their is an inverse relationship between duration and interest rates of the market
T or F. Technical analysis assumes that stock prices move in trends. - ✔️✔️True
Quick ratio formula: - ✔️✔️(Current Assets - Inventory) / Current Liabilities
How frequently do mortgage pass through bonds make payments? - ✔️✔️monthly
Dividends from REITS are taxed as..... - ✔️✔️ordinary income
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