wanganjie

 

AIM 3: Analyze the impact horizon, turnover, leverage, risk measures, and risk controls have on risk management processes in the investment management industry.

1、Compared to banks, the “sell side”, investors on the “buy side” have:

A) a shorter horizon and slower turnover. 

B) a longer horizon and slower turnover. 

C) a longer horizon and faster turnover. 

D) a shorter horizon and faster turnover. 

wanganjie

 

The correct answer is B

Compared to banks on the “sell side”, investors on the “buy side” have a longer horizon, slower turnover, and lower leverage.

wanganjie

 

AIM 10: Explain, from a risk management perspective, the pros and cons of having a global custodian.

1、If the top management of a large firm finds that the overall risk of the firm’s portfolios has changed, which of the following would NOT be a likely reason?

A) Many of the managers have unknowingly made very different style bets.

B) Individual managers have exceeded their risk budget.

C) Rogue traders have made unauthorized trades.

D) The overall markets have become more volatile.

wanganjie

 

The correct answer is A

Making different style bets would increase the diversification and lower risk.

wanganjie

 

AIM 11: Discuss trends in risk management systems used by money managers.

1、Trends in risk management systems by money managers include(s):

A) a decreased use of such systems in a fairly homogenous fashion. 

B) a decreased use of such systems and efforts to differentiate themselves by the type of management used. 

C) an increased use of such systems and efforts to differentiate themselves by the type of management used. 

D) an increased use of such systems in a fairly homogenous fashion. 

wanganjie

 

The correct answer is C

Money managers who are not increasing their use of risk management systems will probably find themselves at a competitive disadvantage.

binsi

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