AWMA | MODULE 3 QUIZ ADVANCED
INVESTMENT PRODUCTS AND
STRATEGIES QUESTIONS AND
ANSWERS WITH SOLUTIONS 2024
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.
A client who expects her portfolio of intermediate-term government bonds to earn 12% a year suffers
from which one of the following?
A) Overconfidence bias
B) Overreaction to market events
C) Unrealistic expectations
D) Inadequate time horizons - ANSWER C
Historically, intermediate-term government bonds have had an annual return of between 5% and 6%, so
this client has unrealistic expectations.
Reasons for investing in real estate include all of the following except
A) tax shelter potential.
B) liquidity.
C) long-term appreciation potential.
D) relatively constant cash flow. - ANSWER B
Real estate is generally an illiquid investment.
Which one of the following is a disadvantage of a REIT investment?
A) A lack of knowledgeable professionals as managers
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Performance. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $15.49. You're not tied to anything after your purchase.
