CSC

CSC practice questions, page 4 of 4, with answer review and explanations.

Question 16

Which institutional client trades securities for its own account on both the buy-side and the sell-side of the market?

  1. Investment management firm.
  2. Corporate treasury.
  3. Pension fund.
  4. Investment dealer.

Question 17

What expenses are excluded from the management expense ratio calculation?

  1. Audit and legal costs.
  2. Trading and brokerage costs.
  3. Safekeeping and custodial fees.
  4. Taxes.

Question 18

What is the typical characteristic of a bottom-up growth portfolio manager?

  1. Seeks out companies that are not vulnerable to market cycles.
  2. Identifies stocks with earning momentum by focusing on a company’s current and future prospects.
  3. Looks for stocks that have a high dividend yield.
  4. Buys and holds stocks for the long term, resulting in low portfolio turnover.

Question 19

What best describes the investment strategies used by an interest-rate anticipator manager?

  1. Altering the bond term to maintain the duration of the portfolio at the average level of mid-term interest rates.
  2. Decreasing the duration of the portfolio to reduce the potential loss during periods of falling interest rates.
  3. Holding bonds to maturity except during periods when the yield curve is inverted or flat.
  4. Extending the average term of the bonds held in the portfolio when a decrease in the general level of interest rates is anticipated.

Question 20

What event would necessitate a change to an investor’s time horizon?

  1. The investor will soon make a sizeable deposit into the portfolio.
  2. The investor will soon be married.
  3. The investor will soon sell a stock for a considerable loss in the portfolio.
  4. The investor will soon be moving to another investment dealer.