1．Which of the following factors are least likely to affect the formulation of an investment policy statement for a university’s endowment fund?

A)   Legal and regulatory factors.

B)   Tax considerations.

C)   Multi-stage time horizons.

D)   Social considerations.

2．A defined benefit pension plan would most likely have which of the following set of return objectives and risk tolerance?

A)Life cycle stage of beneficiaries         Risk tolerance of beneficiaries

B)Fund pension liablility + inflation        Plan features, funding status of plan, & age of workforce

C)Pension liablility + inflation                Risk tolerance of beneficiaries

D)Life cycle stage of beneficiaries         Plan features, funding status of plan

3．Which of the following statements regarding the effect of investors’ time horizon on portfolio choice is least accurate?

A)   Legal and regulatory factors usually do not affect the investment policies of individual investors.

B)   Endowments and foundations typically invest with an average or below average tolerance for risk.

C)   A commercial bank’s required return on investment is typically a function of its cost of funds.

D)   Longer time horizons may indicate an investor’s greater ability to take risk, even if willingness is not apparent.

答案和详解如下：

1．Which of the following factors are least likely to affect the formulation of an investment policy statement for a university’s endowment fund?

A)   Legal and regulatory factors.

B)   Tax considerations.

C)   Multi-stage time horizons.

D)   Social considerations.

The correct answer was B)

An endowment would receive tax-exempt status, and therefore would not have to include tax considerations when formulating an investment policy statement.

2．A defined benefit pension plan would most likely have which of the following set of return objectives and risk tolerance?

Return Requirements

Risk Tolerance

A)Life cycle stage of beneficiaries   Risk tolerance of beneficiaries

B)Fund pension liablility + inflation         Plan features, funding status of plan, & age of workforce

C)Pension liablility + inflation             Risk tolerance of beneficiaries

D)Life cycle stage of beneficiaries   Plan features, funding status of plan

The correct answer was B)

For a defined benefit pension plan, return requirements are based upon the minimum needed to fund the pension liability while accounting for inflation. The risk tolerance is dependent upon the plan’s features, the age of the workforce, and the funding status of the plan.

3．Which of the following statements regarding the effect of investors’ time horizon on portfolio choice is least accurate?

A)   Legal and regulatory factors usually do not affect the investment policies of individual investors.

B)   Endowments and foundations typically invest with an average or below average tolerance for risk.

C)   A commercial bank’s required return on investment is typically a function of its cost of funds.

D)   Longer time horizons may indicate an investor’s greater ability to take risk, even if willingness is not apparent.

The correct answer was B)

Endowments and foundations typically invest with an average or above average tolerance for risk, in part due to their relatively longer investment time horizons.