Questions from General Investment

Q: Jill Davis tells her broker that she does not want to sell

Jill Davis tells her broker that she does not want to sell her stocks that are below the price she paid for them. She believes that if she just holds on to them a little longer, they will recover, at...

Q: After Polly Shrum sells a stock, she avoids following it in

After Polly Shrum sells a stock, she avoids following it in the media. She is afraid that it may subsequently increase in price. What behavioral characteristic does Shrum have as the basis for her dec...

Q: All of the following actions are consistent with feelings of regret except

All of the following actions are consistent with feelings of regret except: a. Selling losers quickly. b. Hiring a full-service broker. c. Holding on to losers too long.

Q: Which one of the following would be a bullish signal to a

Which one of the following would be a bullish signal to a technical analyst using moving average rules? a. A stock price crosses above its 52-week moving average. b. A stock price crosses below its...

Q: Define the following types of bonds: a. Catastrophe bond

Define the following types of bonds: a. Catastrophe bond. b. Eurobond. c. Zero-coupon bond. d. Samurai bond. e. Junk bond. f. Convertible bond. g. Serial bond. h. Equipment obligation bond. i...

Q: An investor believes that a bond may temporarily increase in credit risk

An investor believes that a bond may temporarily increase in credit risk. Which of the following would be the most liquid method of exploiting this? a. The purchase of a credit default swap. b. The...

Q: Which of the following most accurately describes the behavior of credit default

Which of the following most accurately describes the behavior of credit default swaps? a. When credit risk increases, swap premiums increase. b. When credit and interest rate risks increase, swap pr...

Q: You buy an eight-year maturity bond that has a 6

You buy an eight-year maturity bond that has a 6% current yield and a 6% coupon (paid annually). In one year, promised yields to maturity have risen to 7%. What is your holdingperiod return?

Q: The stated yield to maturity and realized compound yield to maturity of

The stated yield to maturity and realized compound yield to maturity of a (default-free) zero-coupon bond are always equal. Why?

Q: Here are some characteristics of two portfolios, the market index,

Here are some characteristics of two portfolios, the market index, and the risk-free asset. a. If you currently hold a market-index portfolio, would you choose to add either portfolio A or B to your h...