《Midsemester Trial Test Paper》.doc

School of Economics and Finance La Trobe University Investment and Portfolio Management (FIN3IPM) Semester 1, 2013 MIDSEMESTER TRIAL TEST PAPER The material provided includes: The mid-semester test multiple-choice questions with Multipleformula sheet Materials you are allowed to use: A non-programmable or programmable calculator and the formula sheet Instructions: Complete your personal details below prior to beginning the mid-semester test. The test contains 25 multiple-choice questions, which you have 50 minutes to answer. All questions have equal marks. This paper is worth 15% of the subject marks. Answer all questions on the TEST PAPER by placing an X next to your choice of the correct answer. At the end of the test, please hand in the mid-semester test paper and formula sheet. The mid-semester test paper is not to be removed from the examination location. If you remove any part of the test paper from the examination centre you will be given a mark of zero. PERSONAL DETAILS: NAME: ______________________________ Student Number: ______________________________ TUTORIAL TIME: ______________________________ Question 1 Under a normal distribution, what proportion of observations fall within two standard deviations of the mean? A. 50% B. 68% C. 75% D. 95% Question 2 The value of an investment at the end of each of four years is shown above. What is the arithmetic average return over the four years? A. -5.75% B. 4.00% C. 4.25% D. 5.90% Question 3 The value of an investment at the end of each of four years is shown above Question 2. What is the geometric cumulative return over the four years? A. 15.1% B. 24.63% C. 18.7% D. 19.7% Question 4 An investor purchased the investment above. If continuously compounded returns are used, what is the equal-weighted return on the portfolio? A. –12.6% B. –10.5% C. –3.2% D. 2.3 Question 5 Which of the four investments has the highest coefficient of variation? A. Asset A B. Asset B C. Asset C D.