Questions from General Investment


Q: With respect to hedge fund investing, the net return to an

With respect to hedge fund investing, the net return to an investor in a fund of funds would be lower than that earned from an individual hedge fund because of: a. Both the extra layer of fees and th...

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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.

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Q: How might the incentive fee of a hedge fund affect the manager’s

How might the incentive fee of a hedge fund affect the manager’s proclivity to take on high-risk assets in the portfolio?

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Q: Why is it harder to assess the performance of a hedge fund

Why is it harder to assess the performance of a hedge fund portfolio manager than that of a typical mutual fund manager?

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Q: A ship owner is attempting to insure an old vessel for twice

A ship owner is attempting to insure an old vessel for twice its current market value. Is this an adverse selection or moral hazard issue?

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Q: With a traditional tax shelter (Spreadsheet 21.5), compare

With a traditional tax shelter (Spreadsheet 21.5), compare the effect on real consumption during retirement of a 1% increase in the rate of inflation to a 1% increase in the tax rate

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Q: With a progressive tax (Spreadsheet 21.6), compare the

With a progressive tax (Spreadsheet 21.6), compare the effects of an increase of 1% in the lowest tax bracket to an increase of 1% in the highest tax bracket

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Q: Verify that the traditional tax shelter with a progressive tax (Spreadsheet

Verify that the traditional tax shelter with a progressive tax (Spreadsheet 21.7) acts as a hedge. Compare the effect of a decline of 2% in the ROR to an increase of 2% in ROR.

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Q: What is the trade-off between ROR and the rate of

What is the trade-off between ROR and the rate of inflation with a Roth plan under a progressive tax (Spreadsheet 21.8)?

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Q: Helen Morgan, CFA, has been asked to use the dividend

Helen Morgan, CFA, has been asked to use the dividend discount model to determine the value of Sundanci, Inc. Morgan anticipates that Sundanci’s earnings and dividends will grow at 3...

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