Which one of the following best describes the requirements of an investment strategy?
A) Ability, method, opportunity
B) Opportunity, cooperation, goal
C) Competencies, resources, goal, method
D) Method, opportunity, commitment - ANSWER-c.
Competencies, resources, goal, and method are requir...
Which one of the following best describes the requirements of an investment strategy?
A) Ability, method, opportunity
B) Opportunity, cooperation, goal
C) Competencies, resources, goal, method
D) Method, opportunity, commitment - ANSWER-c.
Competencies, resources, goal, and method are requirements of an investment strategy.
Which one of the following investment strategies is the one to follow if markets are truly efficient?
A) Dollar-cost averaging
B) Low P/E
C) Contrarian
D) Buy-and-hold - ANSWER-D.
A buy-and-hold strategy supports the efficient market hypothesis.
Which one of the following industries would be expected to perform well in the early stage of an
economic expansion?
A) Equipment manufacturers
B) Chemicals
C) Food
D) Consumer credit - ANSWER-D.
Consumer credit is one industry that would be expected to perform well in the early stage of an
economic expansion.
Which one of the following indicators would a contrarian investor interpret as a bearish indicator?
, A) A decreased short-interest ratio
B) Large cash positions in mutual funds
C) Bearish investment adviser sentiment
D) A high put-call ratio - ANSWER-A.
A decreased short-interest ratio indicates the consensus view that the market will rise, so contrarians
would view this as a bearish indicator.
What is the minimum percentage of total assets that REITs must invest in real estate?
A) 75%
B) 95%
C) 50%
D) 85% - ANSWER-A.
REITs must invest at least 75% of total assets in real estate.
Which of the following best describes real estate investment trusts (REITs)?
A) Mortgage-backed securities
B) Corporate bonds issued by real estate firms
C) Mutual funds that own real estate
D) U.S. Treasury securities for real estate - ANSWER-C
REITs have been called mutual funds that own real estate.
Which one of the following methods of valuing real estate is similar to the price-to-sales approach to
valuing stocks?
A) Discounted cash flow
B) NOI capitalization
C) Gross income multiplier
D) Perpetuity model - ANSWER-C
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