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LOS f: Contrast the types of investment time horizons, determine the time horizon for a particular investor, and evaluate the effects of this time horizon on portfolio choice.
Q1. Which of the following statements regarding the effect of investors’ time horizon on portfolio choice is least accurate?
A) Endowments and foundations typically invest with an average or below average tolerance for risk.
B) Longer time horizons may indicate an investor’s greater ability to take risk, even if willingness is not apparent.
C) Legal and regulatory factors usually do not affect the investment policies of individual investors.
Q2. 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) Pension liablility + inflation Risk tolerance of beneficiaries
C) Fund pension liablility + inflation Plan features, funding status of plan, & age of workforce
Q3. Which of the following factors are least likely to affect the formulation of an investment policy statement for a university’s endowment fund?
A) Multi-stage time horizons.
B) Tax considerations.
C) Social considerations.
Q4. Max and Anna Klushefski have both turned 30 in the last year. The couple decides 30 is the right age to start thinking more about their future, so they meet with a financial planner, Thelma Black. Both Max and Anna work. Their 401k plans have a combined value of $135,000 and represent their only investment assets. Anna, a schoolteacher, is pregnant with their first child and plans to quit her job when the child is born. The couple hopes to have at least two more children. Max makes $65,000 per year as a junior executive at a clothing firm. The couple has been banking Anna’s salary for the last two years and can live on what Max makes.
Max and Anna had not thought much about their future, but in response to Black’s questions, they come up with two goals:
- Anna wants to stay out of the work force until all of her children are out of the house.
- Max wants to retire at 65 with at least $2 million in his portfolio.
Neither Max nor Anna knows much about investing, but Max’s friends tell him that stocks are the best option because they earn the best returns. Max and Anna want to invest most of their money in stocks.
Based only on the information presented above, the Klushefskis’:
A) investment objectives are too aggressive.
B) plans need to consider time horizons.
C) ability to take risk conflicts with their willingness to take risk. | 
发表于 2009-4-2 14:57
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