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Flashcards in Final Exam Deck (34):
1

Trin statistic, put/call ratio, and short interest are _____ indicators

sentiment

2

Relative strength and market breadth are ____ indicators

technical

3

Moving averages are _____ indicators

trend

4

Following a period of falling prices, the moving average will

be above the current price

5

A moving average of stock prices is

less volatile than the actual prices

6

if investors overweight recent performance in forecasting the future, they are exhibiting

representativeness bias

7

A trin ratio of greater than 1 is considered a

bearish signal

8

contrarian investors consider a high put/call ratio a

bullish signal

9

a trin statistic of less than 1 is considered a

bullish signal

10

If you are not a contrarian, you consider a high a put/call ratio to be a

bearish signal

11

During a period when prices have been rising, the ______ will be ______ the current price.

moving average; below

12

trend analysts who follow bonds are most likely to monitor the

confidence index

13

Floating rate bonds have a _____ that is adjusted with current market interest rates

coupon rate

14

the primary difference between treasury notes and bonds is

maturity at issue

15

synthetically created zero-coupon bonds

STRIPS

16

Inflated indexed Treasury securities are commonly called

TIPS

17

Everything else equal, the ____ the maturity of the bond and the ____ the coupon, the greater the sensitivity of the bond's price to interest rate changes.

longer; lower

18

A ______ bond gives the issuer an option to retire the bond before maturity at a specific price after a specific date.

callable

19

A ______ bond gives the bondholder the right to cash in the bond before maturity at a specific price after a specific date.

puttable

20

which bond would you most likely sell at lowest yield

puttable mortgage bond

21

You can be sure that a bond will sell at a premium to par when its coupon rate is _____ than its _______

greater; yield to maturity

22

Because of convexity, when interest rates change, the actual bond price will _______ the bond price predicted by duration

always be higher than

23

A bond's price volatility _______ at ______ rate as maturity increase

increases; a decreasing

24

all else equal, bond price volatility is greater for

lower coupon rates

25

All else equal, a bond's duration is

lower when the yield to maturity is higher
lower when the coupon rate is higher

26

the exchange of one bond for a bond that has similar attributes but is more attractively priced is called

substitution swap

27

In a pure yield pickup swap, ____ bonds are exchanged for ____ bonds

shorter-duration; longer-duration

28

when interest rates increase, the duration of a 20 yr bond selling at a premium

decreases

29

bond with greatest price volatility

low coupon and a long maturity

30

you have an investment horizon of 6 years. bond with duration of 10 years. realized rate of return will be larger than the promised yield on the bond if interest rates

fall

31

you have an investment horizon of 6 years. bond with duration of 4 years. realized rate of return will be larger than the promised yield on the bond if interest rates

increase

32

P/E ratios tend to be _____ when inflations is _____

higher;lower

33

the constant-growth dividend discount model (DDM) can be used only when the growth rate is

less than the required return

34

Firms with higher expected growth rates tend to have P/E ratios that are ______ the P/E ratios of firms with lower expected growth rates

higher than