LOS a: Discuss the role of equities in the overall portfolio.
Q1. Which of the following is least accurate regarding equities in a portfolio?
A) European institutions hold more equity than U.S. institutions in their portfolio.
B) U.S. equity typically constitutes about half of world equity.
C) Equities have been shown to be an inflation hedge worldwide.
Q2. Which of the following is least accurate regarding using equities as an inflation hedge?
A) The effectiveness of an individual stock as a hedge depends on its product market.
B) The historical record is impressive as to their effectiveness.
C) Their ability to hedge is unaffected by taxes.
Q3. Which of the following statements regarding using equities as an inflation hedge is most accurate? They have been a good inflation hedge:
A) in many countries over a long time span.
B) in many countries over a short time span.
C) but only in the U.S for a short time span. |