Q1. Which of the following statements about the importance of risk and return in the investment objective is least accurate?

A)   Expressing investment goals in terms of risk is more appropriate than expressing goals in terms of return.

B)   The return objective may be stated in dollar amounts even if the risk objective is stated in percentages.

C)   The investor’s risk tolerance is likely to determine what level of return will be feasible.

Q2. While assessing an investor’s risk tolerance, a financial adviser is least likely to ask which of the following questions?

A)   “What rate of investment return do you expect?”

B)   “How much insurance coverage do you have?”

C)   “Is your home life stable?”

Q3. Which of the following statements about risk and return is FALSE?

A)   Return-only objectives provide a more concise and efficient way to measure performance for investment managers.

B)   Return objectives should be considered in conjunction with risk preferences.

C)   Return objectives may be stated in dollar amounts.

Q4. Which of the following statements about risk and return is FALSE?

A)   Specifying investment objectives only in terms of return may expose an investor to inappropriately high levels of risk.

B)   Risk and return may be considered on a mutually exclusive basis.

C)   Return objectives may be stated in absolute terms.

Q5. Which of the following factors is least likely to affect an investor’s risk tolerance?

A)   Number of dependent family members.

B)   Level of inflation in the economy.

C)   Level of insurance coverage.

Q6. Which of the following statements about risk is FALSE? Generally, greater:

A)   spending needs allows for greater risk.

B)   insurance coverage allows for greater risk.

C)   existing wealth allows for greater risk.

答案和详解如下：

Q1. Which of the following statements about the importance of risk and return in the investment objective is least accurate?

A)   Expressing investment goals in terms of risk is more appropriate than expressing goals in terms of return.

B)   The return objective may be stated in dollar amounts even if the risk objective is stated in percentages.

C)   The investor’s risk tolerance is likely to determine what level of return will be feasible.

Correct answer is A)

Expressing investment goals in terms of risk is not more appropriate than expressing goals in terms of return. The investment objectives should be stated in terms of both risk and return. Risk tolerance will likely help determine what level of expected return is feasible.

Q2. While assessing an investor’s risk tolerance, a financial adviser is least likely to ask which of the following questions?

A)   “What rate of investment return do you expect?”

B)   “How much insurance coverage do you have?”

C)   “Is your home life stable?”

Correct answer is A)

While the degree of risk tolerance will have an affect on expected returns, assessing the risk tolerance comes first, and the resulting set of feasible returns follows. The other questions address risk tolerance.

Q3. Which of the following statements about risk and return is FALSE?

A)   Return-only objectives provide a more concise and efficient way to measure performance for investment managers.

B)   Return objectives should be considered in conjunction with risk preferences.

C)   Return objectives may be stated in dollar amounts.

Correct answer is A)

Return-only objectives may actually lead to unacceptable behavior on the part of investment managers, such as excessive trading (churning) to generate excessive commissions.

Q4. Which of the following statements about risk and return is FALSE?

A)   Specifying investment objectives only in terms of return may expose an investor to inappropriately high levels of risk.

B)   Risk and return may be considered on a mutually exclusive basis.

C)   Return objectives may be stated in absolute terms.

Correct answer is B)

Risk and return must always be considered together when expressing investment objectives. Return objectives may be expressed either in absolute terms (dollar amounts) or in percentages.

Q5. Which of the following factors is least likely to affect an investor’s risk tolerance?

A)   Number of dependent family members.

B)   Level of inflation in the economy.

C)   Level of insurance coverage.

Correct answer is B)

The level of inflation in the economy should be considered in determining the return objective. Risk tolerance is a function of the investor's psychological makeup and the investor's personal factors such as age, family situation, existing wealth, insurence coverage, current cash reserves and income.

Q6. Which of the following statements about risk is FALSE? Generally, greater:

A)   spending needs allows for greater risk.

B)   insurance coverage allows for greater risk.

C)   existing wealth allows for greater risk.

Correct answer is A)

Greater spending needs usually allow for lower risk because there is a definite need to ensure that the return may adequately fund the spending needs (a “fixed” cost).

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