证券和组合课后习题：tb02

CHAPTER2

THEASSETALLOCATIONDECISION

TRUE/FALSEQUESTIONS

(t)1Expertssuggestlifeinsurancecoverageshouldbeseventotentimesan

individuaFsannualsalary.

(f)2Termlifeinsuranceprovidesbothadeathbenefitandasavingsplan.

(f)3Mostexpertsrecommendacashreserveofatleastoneyear'sworthofliving

expenses.

(f)4Thespendingphaseoccurswheninvestorsarerelativelyyoung.

(t)5Thegiftingphaseissimilarto,andmaybeconcurrentwith,thespendingphase.

(t)6Long-term,high-prioritygoalsincludesomeformoffinancialindependence.

(f)7Itisnotagoodideatogettoospecificwhenconstructingyourpolicystatement.

(t)8Assetallocationistheprocessofdividingfundsintodifferentclassesofassets.

(f)9Thetypicalinvestor'sgoalsrarelychangeduringhis/herlifetime.

(f)10Individualsecurityselectionisfarmoreimportantthantheassetallocationdecision.

(f)11Returnistheonlyimportantconsiderationwhenestablishinginvestment

objectives.

(f)12Inconstructingtheportfolio,themanagershouldmaximizetheinvestor'srisklevel.

(f)13RisktoleranceisexclusivelyafunctionofanindividuaPspsychologicalmakeup.

(f)14Anappropriateinvestmentobjectiveforatypical25-year-oldinvestorisalow-

riskstrategy,suchascapitalpreservationorcurrentincome.

(t)15Investmentplanningiscomplicatedbythetaxcode.

(t)16Averagetaxrateisdefinedastotaltaxpaymentdividedbytotalincome.

(f)17TheregularIRA,whencomparedtotheRothIRA,willconsistentlygivenan

investormoreaftertaxdollarsattheendofanassumed20-yeartimehorizon.

⑴18Theportfoliomixesofinstitutionalinvestorsaroundtheworldareapproximately

thesame.

MULTIPLECHOICEQUESTIONS

(e)1Thecurrentoutlayofmoneytoguardagainstapotentiallylargefuturelossis

commonlyknownas

a)Assetmanagement.

b)Portfoliomanagement.

c)Minimizingrisk.

d)Losscontrol.

e)Insurance.

(d)2______insuranceprovidesdeathbenefitsonly.

a)Term

b)Variablerate

c)Extendibleindemnity

d)Fullterm

e)Life

(a)3phraseisthestagewheninvestorsintheirearly-to-middleearning

yearsattempttoaccumulateassetstosatisfynear-termneeds,e.g.,children's

educationordownpaymentonahome.

a)Accumulation

b)Spending

c)Gifting

d)Consolidation

e)Divestiture

(a)4Whichofthefollowingisnotalifecyclephase?

a)Discoveryphase

b)Accumulationphase

c)Consolidationphase

d)Spendingphase

e)Giftingphase

(e)5Whichofthefollowingisnotastepintheportfoliomanagementprocess?

a)Developapolicystatement.

b)Studycurrentfinancialandeconomicconditions.

c)Constructtheportfolio.

d)Monitorinvestor'sneedsandmarketconditions.

e)Sellallassetsandreinvestmentproceedsatleastonceayear.

(b)6Thefirststepintheinvestmentprocessisthedevelopmentofa(n)

a)Objectivestatement.

b)Policystatement.

c)Financialstatement.

d)Statementofcashneeds.

e)Statementofcashflows.

(e)7Whichofthefollowingisnotconsideredtobeaninvestmentobjective?

a)Capitalpreservation

b)Capitalappreciation

c)Currentincome

d)Totalreturn

e)Noneoftheabove(thatis,allareconsideredinvestmentobjectives)

(d)8____________mustbestatedintermsofexpectedreturnsandrisk.Aninvestor's

toleranceforriskmustbeestablishedbeforereturnsobjectivescanbestated.

a)Investmentrequirements

b)Portfoliogoals

c)Investmentrewards

d)Investmentobjectives

e)Portfolioobjectives

(b)9_______________isanappropriateobjectiveforinvestorswhowanttheir

portfoliotogrowinrealterms,i.e.,exceedtherateofinflation.

a)Capitalpreservation

b)Capitalappreciation

c)Portfoliogrowth

d)Valueadditivity

e)Nominalpreservation

(a)10___________refer(s)totheabilitytoconvertassetstocashquicklyandatafair

marketpriceandoftenincrease(s)asoneapproachesthelaterstagesofthe

investmentlifecycle.

a)Liquidityneeds

b)Timehorizons

c)Liquidationvalues

d)Liquidationessentials

e)Capitalliquidations

(b)11Thepolicystatementmayincludea__________againstwhichaportfolio'sor

portfoliomanager'sperformancecanbemeasured.

a)Milestone

b)Benchmark

c)Landmark

d)Referencepoint

e)Marketpair

AL

x

\

a1

7Theprocessofdividingfundsintoassetclasses.

bX

1

7Concernedwithreturnsvariability.

\

c!

/Concernedwiththeriskassociatedwithdifferentassets.

d\

7Concernedwiththerelationshipamonginvestments'returns.

\

e1

/Alloftheabove.

(e)13Theassetallocationdecisionmustinvolveaconsiderationof

a)Culturaldifferences.

b)Theobjectivesstatedintheinvestor'spolicystatement.

c)Thetypesofassetsthatareappropriatefbrtheinvestor.

d)Theriskassociatedwithdifferentinvestments.

e)Alloftheabove.

(d)14Reinvestmentriskisthe

a)Riskthataninvestmentwillnotbemarketable.

b)Riskthataninvestmentwillalteryourtaxstatus.

c)Riskthatyourinvestmentwillfaceregulatoryconstraints.

d)Riskthatinvestmentreturnswillnotbeabletobereinvestedatadesirablerate.

e)Riskthataninvestmentcannotbesoldforcashatafairprice.

(d)15Oncetheportfolioisconstructed,itmustbecontinuously

a)Rebalanced.

b)Recycled

c)Reinvested

d)Monitored.

e)Manipulated.

(a)16Whichofthefollowingstatementsisfalse?

a)Unrealizedcapitalgainsaretaxable.

b)Realizedcapitalgainsaretaxable.

c)Tax-exemptinvestmentsareattractivetoindividualswithhightax

liabilities.

d)Returnscomparisonsshouldbemadeonanequivalenttaxbasis.

e)Taxexemptinvestorsprefertaxexemptinvestments.

(a)17gainsaretaxableandoccurwhenanassetissoldformorethanits

basis(thevalueoftheassetwhenitwaspurchasedbytheoriginalowner,or

inheritedbytheheirsoftheoriginalowner).

a)Realizedcapital

b)Income

c)Portfolio

d)Nominal

e)Real

(d)18Whichofthefollowingstatementsistrue?

a)Exceptfortax-exemptinvestorsandtax-deferredaccounts,annualtax

paymentsincreaseinvestmentreturns.

b)Theonlywaytomaintainpurchasingpowerovertimeistoinvestinbonds,

c)Afteradjustingfortaxes,long-termbondsconsistentlyoutperformstocks.

d)Anassetallocationdecisionforataxableportfoliothatdoesnotincludea

substantialcommitmenttocommonstocksmaymakeitdifficultforthe

portfoliotomaintainrealvalueovertime.

e)Noneoftheabove

(d)19Importantreasonsforconstructingapolicystatementinclude:

a)Helpsinvestorsdecideonrealisticinvestmentgoals

b)Createastandardbywhichtojudgetheperformanceoftheportfoliomanager

c)Developaninstrumenttojudgerisk

d)Choicesaandb

e)Alloftheabove

(a)20Inaninvestmentpolicystatementtheobjectivesofaninvestorareexpressedin

termsof

a)riskandreturn

b)risk

c)return

d)timehorizon

e)liquidityneeds

(e)21Researchhasshownthattheassetallocationdecisionexplains_%ofthe

variation

infundreturnsacrossallfunds,and_%ofthevariationinreturnsforaparticular

fundover

a)90and100.

b)100and40.

c)90and40.

d)40and100.

e)40and90.

MULTIPLECHOICEPROBLEMS

(a)1Whatisthemarginaltaxrateforasingleindividualifhis/hertaxableincomeis

$30,000,$70,000,or$125,000?

a)28%,31%,36%

b)28%,28%,31%

c)15%,28%,31%

d)15%,28%,28%

e)15%,31%,31%

(C)2Whatisthetaxbillforacouple,filingjointly,iftheirtaxableincomeis$50,000?

Whatisthecouple'saveragetaxrateforthislevelofincome?

a)$8,644,28.00%

b)$6,180,17.29%

c)$8,124,16.25%

d)$2,464,17.29%

e)$8,644,15.00%

(d)3Whatwouldtheequivalenttaxableyieldbeonaninvestmentthatoffersa6

percenttaxexemptyield?Assumeamarginaltaxrateof28%.

a)0.125%,

b)7.20%

c)6.48%

d)8.33%

e)32.14%

(c)4Whatwouldtheafter-taxyieldbeonaninvestmentthatoffersa6percentfully

taxableyield?Assumeamarginaltaxrateof31%.

a)2.79%

b)6.48%

c)4.14%

d)7.20%

e)12.50%

(a)5Thefuturevalueof$25,000investedtoday,attheendof20yearsassumingan

interestrateof11.5%peryear,withsemiannualcompounding,is

a)$233,976

b)$220,515

c)$250,515

d)$500,673

e)$213,321

(b)6Assumethatyouinvest$1()0()attheendofeachquarterforthenext15yearsina

mutualfund.Theannualrateofinterestthatyouexpecttoearninthethisaccount

is8.75%,Theamountintheaccountattheendof15years

a)$28,790

b)$121,749

c)$60,000

d)$315,000

e)$115,637

(d)7Assumingtheinvestor'smarginaltaxrateis28percentandheisconsidering

investinginamunicipalbondyielding7percent.Whatistheequivalenttaxable

yield?

a)5.04%

b)5.47%

c)8.96%

d)9.72%

e)9.80%

(d)8Whatisthemarginaltaxrateforasingleindividualwithtaxableincomeof

$30,000?Whatishistaxbill?

a)15%,$4057.50

b)15%,$5,350.00

c)28%,$5,195.50

d)28%,$4883.50

e)28%,$9,047.50

(d)9Whatisthemarginaltaxrateforacouple,filingjointlywithataxableincomeof

$150,000?Whatisthetaxbill?

a)15%,$16,780

b)28%,$26,464

c)36%,$42,446

d)31%,$36,124

e)31%,$38,644

(b)10Someoneinthe15percenttaxbracketcanearn8percentonhisinvestmentsina

tax-exemptIRAaccount.Whatwillbethevalueofa$10,000investmentafter5

years(assumingannualcompounding)?

a)$6,805

b)$14,693

c)$15,528

d)$20,114

e)$50,00()

(c)11Supposethe8percentinvestmentofthepreviousproblemistaxableratherthan

tax-deferred.Whatwillbetheafter-taxvalueofhis$10,00()investmentafter5

years(assumingannualcompounding)?

a)$10,680

b)$11,765

c)$13,895

d)$14,693

e)$15,528

CHAPTER2

ANSWERSTOPROBLEMS

1.SeeTaxTablepage47.

2.$6,780+.28($50,000-$45,200)=$6,180+$1344=$8,124(taxbill)

$8,124/$50,000=16.25%(averagetaxrate)

3.Equivalenttaxableyield=.06/(1-.28)=.06/.72=8.33%

4.After-taxyield=Before-taxyield(1-TaxRate)=6%(1-.31)=4.14%

5.FV=25,000(1+.O57540)=$233,976

1+0218756

6.FV=100(((-°)-C=$121,749

\.021875J

7.Equivalenttaxableyield=.07/(1-.28)=.07/.72=9.72%

8.Marginaltaxrate=28%

Taxesdue=$4057.50+.28($30,000-27,050)

=$4057.50+$826=$4883.50

9.Marginaltaxrate=28%

Taxesdue=$24,714+.28($150,000-$109,250)

=$24,714+$11410=$36,124

10.$10,000(FVIF8%55years)=$10,000(1.4693)=$14,693

11.After-taxyield=Before-taxyield(1-Taxrate)

=8%(1-.15)=6.8%

$10,000(FVIF6.8%,5years)=$10,000(1.3895)=$13,895

CHAPTER2-APPENDIX

TRUE/FALSEQUESTIONS

(t)1ANon-lifeinsurancecompanieshavesomewhatunpredictablecashoutflowsand

arethereforefacedwithdifferentinvestmentconstraintsthanlifeinsurance

companies.

(t)2AManyendowmentsaretax-exempt.

(f)3ACashflowsfbrnonlifeinsurancecompanies,suchaspropertyandcasualty,are

similartocashflowsoflifeinsurancecompanies.

(t)4ABanksmustcompeteforfunds(savingsdeposits,CD's,etc.)inordertomake

loansandothertypesofinvestments.

(t)5ABankshavehighliquidityneedsandtherefore,haveashorttimehorizon.

(t)6ABanksfaceregulatoryconstraintsatboththestateandfederallevel.

MUTIPLECHOICEQUESTIONS

(c)1AWhichofthefollowingisnottrueregardingdefinedcontributionpensionplans?

a)Employeesmakeregularcontributionstotheplan.

b)Employersmakeregularcontributionstotheplan.

c)Theemployerbearsalloftheinvestmentrisk.

d)Benefitsaredirectlyrelatedtotheearningsofthefundsinvestments.

e)Thenumberofdefinedcontributionplansisincreasing.

(e)2AInadefinedcontributionpensionplan,

a)Theplandoesnotpromisetopaytheretireeaspecificincomestreamafter

retirement.

b)Theplandoespromisetopaytheretireeaspecificincomestreamafter

retirement.

c)Theemployee'sretirementincomeisnotanobligationofthefirm.

d)Thecompanycarriestheriskofpayingfuturepensionbenefitstoretirees.

e)Choicesaandc

(b)3ATheretirementplanthatpromisestopaya