Questions from General Investment

Q: A pension fund portfolio begins with $500,000 and earns

A pension fund portfolio begins with $500,000 and earns 15% the first year and 10% the second year. At the beginning of the second year, the sponsor contributes another $500,000. What were the time-we...

Q: Which of the following hedge fund types is most likely to have

Which of the following hedge fund types is most likely to have a return that is closest to risk free? a. A market-neutral hedge fund. b. An event-driven hedge fund. c. A long/short hedge fund.

Q: A hedge fund with $1 billion of assets charges a management

A hedge fund with $1 billion of assets charges a management fee of 2% and an incentive fee of 20% of returns over a money market rate, which currently is 5%. Calculate total fees, both in dollars and...

Q: Prices of long-term bonds are more volatile than prices of

Prices of long-term bonds are more volatile than prices of short-term bonds. However, yields to maturity of short-term bonds fluctuate more than yields of long-term bonds. How do you reconcile these t...

Q: According to supply-side economists, what will be the long

According to supply-side economists, what will be the long-run impact on prices of a reduction in income tax rates?

Q: Currently, the term structure is as follows: 1-year

Currently, the term structure is as follows: 1-year zero-coupon bonds yield 7%; 2-year zerocoupon bonds yield 8%; 3-year and longer-maturity zero-coupon bonds all yield 9%. You are choosing between 1-...

Q: In which stage of the industry life cycle would you place the

In which stage of the industry life cycle would you place the following industries? (Note: There is considerable room for disagreement concerning the “correct” answers to this question.) a. Oil well e...

Q: For each pair of firms, choose the one that you think

For each pair of firms, choose the one that you think would be more sensitive to the business cycle. a. General Autos or General Pharmaceuticals. b. Friendly Airlines or Happy Cinemas.

Q: Why do you think the index of consumer expectations for business conditions

Why do you think the index of consumer expectations for business conditions is a useful leading indicator of the macroeconomy? (See Table 17.2.)

Q: Here are four industries and four forecasts for the macroeconomy. Match

Here are four industries and four forecasts for the macroeconomy. Match the industry to the scenario in which it is likely to be the best performer.