- With respect to the seed and start-up point in the early stage of venture capital, which of the two represents a point where the company has already started generating revenue? A) Not at the seed point, but revenue has begun at the start-up point. B) Not at the start-up point, but revenue has begun at the seed point. C) In neither the seed nor start-up point. 2. In which of the following markets would the calculation of market impact costs be inappropriate? A) Auction markets. B) Electronic limit-order markets. C) Electronic crossing networks. 3. To maintain the same equity beta after decreasing the percentage of pension assets invested in equities a firm would need to: A) increase the amount of risk in its capital structure by using more equity capital. B) increase the amount of risk in its capital structure by using more debt financing. C) decrease the amount of risk in its capital structure by using less equity capital. 4. Which of the following statements about the evaluation of portfolio performance is FALSE? A) In the decomposition of portfolio performance, a naive portfolio is constructed with its standard deviation set equal to the total risk of the manager’s portfolio that is being evaluated. B) The security market line (SML) represents an active investment strategy when Jensen’s Alpha is used as the measure for portfolio performance. C) When using the Sharpe ratio, the portfolio with the highest capital allocation line (CAL) slope is the best portfolio. 5. In comparing macro and micro performance attribution methodologies to evaluate the drivers of investment performance, it is most correct to say that: A) micro evaluation is an incremental approach and macro evaluation focuses on deviations from benchmarks. B) macro evaluation is an incremental approach and micro evaluation focuses on deviations from benchmarks. C) both macro and micro evaluation focus on the deviations from benchmarks. 6. Brian Bellow, a CFA Institute member, is a portfolio manager for Progressive Trust Company. Several friends asked Bellow to review their investment portfolios. On his own time, Bellow examined their portfolios and made several recommendations. He received no monetary compensation from his friends for his investment advice and provided no future investment counsel to them. According to CFA Institute Standards of Professional Conduct, did Bellow violate his duty to Progressive Trust? A) Yes, because he undertook an independent practice that could result in compensation or other benefit to him. B) No, because Bellow received no monetary compensation for his services. C) No, because Bellow provided no ongoing investment advice. 7. A shortfall implementation strategy trades: A) with market flow and attempts to minimize opportunity costs. B) early in the day and attempts to minimize opportunity costs. C) early in the day and attempts to maximize trading cost volatility.
1 C 2 B 3 B 4 B 5 B 6 A 7 C
C A - not sure A C B A - not sure A
- C 2. C 3. B 4. A? 5. B 6. B 7. B
Wow, three different responses on questions 2, 4, & 7!
1 C 2 A (not sure) 3 B 4 A (not sure) 5 A 6 B 7 B Thanks for the quiz Bankin’!
1.A 2.C 3.B 4.B 5.B 6.B 7.A
CCBBBAB fine, edit – i’ll go vertical. C C B B B A B
1 C 2 C 3B 4A 5B 6B 7A
C B B A C B A this could be ugly…
CCBABBB
C C B A B A B
- C 2) C 3) B 4) B 5) B 6) A 7) B
C C A B B A B
a c b b b b a
I bet Lance and Medelbrot are right about #1. I was thinking profits, not revenue.
I could go either way just about every one of these. I am pretty sure early stage is before revenue and that includes seed and start up… then later stage w/ revenue and then exit. for #2 I thought there was no market impact with a limit order? But, is there even such a thing as an electronic limit order market? With an ECN they cross at a the avg of the bid/ask at predetermined times. So if you have a huge order wouldn’t that move the bid/ask? I drew a blank here…
I think electronic limit order markets are a hybrid between dealer markets and auctions. I know ECNs have no price discovery so I leaned in that direction.
- A 2. A 3. B 4. B 5. A 6. B 7. B I’m the only one so far with no “C’s”. Can’t be good.
Give em a chance Dwight. We have already whacked the Ds.