It is given that both a one-year put option option year zero coupon bond with a face value of Y. To replicate the long put p

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A portfolio has three stocks - - 240 shares of Yahoo (YHOO), 110 Shares of General Motors (GM), and 30 shares of Standard and Poor's Index Fund (SPY). If the price of YHOO is $30, the price of GM is $30, and the price of SPY is $130, calculate the portfolio weight of YHOO and GM. O 50.0%, 22.9% O 27.5%, 42.4% 47.5%, 24.1% O 15.0%, 13.8%

If the price of gold becomes less volatile, then, other things equal, the demand for stocks will demand for gold will Select one: O a. increase; increase b. increase; decrease C. decrease; decrease O d. decrease, increase and the X Incorrect

You have decided to invest in an open-end mutual fund. You are currently looking at a fund-Washington Premier Fund-in your newspaper. The fund is quoted as: Name NAV Net Chg YTD %RET 36.25 0.15 6.95 Assume that today's opening price of Washington Premier Fund equals yesterday's closing price. If you wanted to make your investment first thing this morning, then you should expect to pay for each share of since it Yesterday, each share of sold for $35.95 $43.50 $36.25 $34.44 $0.15 less $0.15 more $6.95 less $6.95 more If you had $8,000 available to invest, you could purchase than it did the day before, and offers a return of 294 368 assesses a 0.15% fee 276 shares of. is a no-load fund charges a 6.95% fee 221 Your evaluation of the Washington Premier Fund is made easier by the fact that: your investment choices are limited. mutual funds are careful to explicitly state their investment objectives. a mutual fund broker will select a customized mix for you. 0.15% 36.25% 6.95% for the year.

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Ceteris paribus, the primary advantage of investing in mutual funds over individual stocks or bonds is that mutual funds: Select one: O a. always earn a higher rate of return than an investor could obtain with a single stock or bond. Ob. allow investors with relatively small amounts of money to diversify their investment portfolios. C. offer investors less inflation risk, and thus a higher return, than an investor could obtain with a single stock. O d. offer investors less market risk, and thus a higher return, than an investor could obtain with a single stock.

One main assumption underlying the segmented markets theory is that: O A. Markets for different maturity bonds are not completely separate. O B. Markets for different maturity bonds are completely separate. O C. Bonds of different maturities are substitutes. O D. All of the listed options are incorrect.

The graph to the right shows the budget line and indifference curves for two investors, A and B. Labels with the subscript 'm' refer to the stock market as a whole. Which of the following correctly interprets the graphical analysis? O A. B is more risk averse than A. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, A will invest a greater portion of her wealth in stocks. OB. A is more risk averse than B. While A will invest in a mixture of stocks and risk-free T-bills, B will want to invest more than 100 percent of her wealth in stocks. ⒸC. A is more risk averse than B. Although both investors are risk averse and will want to invest in a mixture of stocks and risk-free T-bills, B will invest a greater portion of her wealth in stocks. O D. B is more risk averse than A. While B will invest in a mixture of stocks and risk-free T-bills, A will want to invest more than 100 percent of her wealth in stocks R GA UA om B Standard…

Suppose Caroline is choosing how to allocate her portfolio between two asset classes: risk-free government bonds and a risky group of diversified stocks. The following table shows the risk and return associated with different combinations of stocks and bonds.CombinationFraction of Portfolio in Diversified StocksAverage Annual ReturnStandard Deviation of Portfolio Return (Risk)(Percent)(Percent)(Percent)A 0 1.50 0B 25 3.00 5C 50 4.50 10D 75 6.00 15E 100 7.50 20There is a relationship between the risk of Caroline's portfolio and its average annual return.Suppose Caroline currently allocates 75% of her portfolio to a diversified group of stocks and 25% of her portfolio to risk-free bonds; that is, she chooses combination D. She wants to reduce the level of risk associated with her portfolio from a standard deviation of 15 to a standard deviation of 5. In order to do so, she must do which of the following? Check all that apply. Sell some of her stocks and use the proceeds to purchase…