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Question 1

What is the standard deviation (in dollars) of a portfolio worth $10,000, of which $4,000 is invested in Stock A, with an expected return of 10% and standard deviation of 20%; and the rest in Stock B, with an expected return of 12% and a standard deviation of 25%. The correlation between the two stocks is 0.6.

Options :

A : $2,081

B : $1,201

C : $1,204

D : $4,330,000

Answer: A

Question 2

What is the running yield on a 6% coupon bond selling at a clean price of $96?

Options :

A : 5.70%

B : 6.25%

C : 6.30%

D : 6.00%

Answer: B

Question 3

The two components of risk in a commodities futures portfolio are:

Options :

A : Changes in the convenience yield and storage costs

B : Changes in spot prices and carrying costs, also called commodity lease rates

C : Changes in interest rates and spot prices

D : The risk from change in basis and interest rates

Answer: B

Question 4

By market convention, which of the following currencies are not quoted in terms of 'direct quotes' versus the USD?

Options :

A : EUR

B : EUR

C : KWD

Answer: A

Question 5

A US treasury bill with 90 days to maturity and a face value of $100 is priced at $98. What is the annual bondequivalent yield on this treasury bill?

Options :

A : 8.16%

B : 8.11%

C : 8.28%

D : 8.00%

Answer: C