Reading 76: Alternative Investments - LOS b, ～ Q1-6

答案和详解如下：

1.Closed-end funds and exchange traded funds (ETFs) have which of the following characteristics in common?

A)   Both closed-end funds and ETFs stand ready to redeem shares.

B)   Shares of both closed-end funds and ETFs trade in the secondary market.

C)   Both closed-end funds and ETFs hold portfolios designed to track specific indexes.

D)   The structures of closed-end funds and ETFs prevent shares from trading at a significant premium or discount to NAV.

The correct answer was B)

Only ETFs stand ready to redeem shares; investors in closed-end funds can only divest through trading in the secondary market. ETFs typically track an index, while closed-end funds may pursue any of a number of investment strategies. The in-kind redemption process prevents ETFs from trading at significant premiums or discounts. There are no barriers in the structure of closed-end funds to prevent share prices deviating from NAV. Shares of both closed-end funds and ETFs do trade in the secondary market.

2.Which of the following statements regarding exchange traded funds (ETFs) is FALSE?

A)   ETF investors own shares of the underlying investment company.

B)   ETF shares can be sold short or margined.

C)   ETFs are funds that can be traded in a stock market.

D)   ETFs are designed to track the performance of a designated index.

The correct answer was A)

ETF shares trades in the stock market just like traditional equities, and can be sold short or margined. ETFs are index-based investment vehicles, designed to mimic the performance of their underlying index. ETF investors own shares of the underlying investment portfolio, not of the company.

3.Which of the following statements about exchange-traded funds (ETFs) and closed-end funds is FALSE?

A)   ETFs attempt to track the performance of a stock index, but closed-end funds usually do not.

B)   Because of arbitrage, shares of an ETF rarely trade at a premium or discount to NAV as shares of a closed-end fund often do.

C)   Market specialists can create new shares of an ETF by depositing the underlying stocks, a strategy that cannot be used with closed-end funds.

D)   ETFs can only trade in the secondary market, while closed-end funds can be redeemed in cash by the manager of the underlying index.

The correct answer was D)

While both ETFs and closed-end funds trade on stock exchanges, only ETFs can be redeemed in cash. The other three statements are true.

4.A portfolio that pursues a stable-value investment strategy would most likely invest in:

A)   low P/E stocks.

B)   short-term Treasuries.

C)   high P/E stocks.

D)   small-cap stocks.

The correct answer was B)

Investing in low P/E stocks is a value strategy. Buying high P/E stocks is a growth strategy. One form of a style strategy is to invest in small-cap stocks. A stable-value fund would be most likely to invest in short-term, fixed-income securities.

5.The Big Fund is a mutual fund that invests primarily in the equity of pharmaceutical companies. The investment style of the Big Fund can best be classified as a:

A)   large-cap strategy.

B)   growth strategy.

C)   sector strategy.

D)   style strategy.

The correct answer was C)

A large-cap strategy focuses on the equities of companies with large capitalization. A fund pursuing a growth strategy invests in stocks with high price-to-earnings ratios. Both large cap and growth are examples of style strategies, which look for investments with common underlying characteristics. A sector strategy invests in one, defined industry.

6.Growth, value, large-cap, and small-cap investing are all examples of:

A)   sector investment strategies.

B)   style investment strategies.

C)   index investment strategies.

D)   global investment strategies.

The correct answer was B)

A sector strategy invests in the stocks of a particular industry. An index strategy models the portfolio to mimic the benchmark index. A global investment strategy invests in securities from around the world. A style strategy looks for investments with common underlying characteristics.