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  • "Portfolio Management": the stand-alone risk

    来源: 正保会计网校 2020-09-10
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    Questions 1:

    In the context of strategic asset allocation, adding asset classes with low correlation will most likely improve a portfolio's risk-return trade-off as long as the stand-alone risk of the added asset class: 

    A. does not exceed its diversification effect. 

    B. equals its diversification effect. 

    C. exceeds its diversification effect.

    Questions 2:

    You are preparing an investment policy statement for a client who manages her own successful marketing consultancy. Her annual income is approximately $500,000. She describes herself as a finance novice. Most of her savings are invested in bank term deposits and short-term government securities. In her responses to the standard risk assessment questionnaire, she strongly agrees with the statements that she "feels more comfortable putting money in a bank account than in the stock market." Also, she "thinks of the word 'risk' as being a 'loss'". Based on this information, your client's ability and willingness to take risk can best be described as: 

    A. high ability and low willingness. 

    B. high ability and willingness. 

    C. low ability and high willingness.

    View answer resolution

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