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LOS k: Contrast investment companies, commodity pools, and hedge funds to other types of institutional investors.
Q1. Connie King prepared a memo for her supervisor that listed the similarities and differences between the investment objectives of a life insurance company versus the investment objective of a commodity pool. The memo contained the following statements:
Statement 1: Both life insurance companies and commodity pools are taxable entities.
Statement 2: Life insurance companies invest in order to meet various funding requirements while commodity pools invest according to objectives advertised to investors.
Statement 3: The source of invested assets for both life insurance companies and commodity pools are assets pooled from investors.
King’s memo is:
A) correct with respect to Statements 1, 2, and 3.
B) correct with respect to Statements 1 and 2, but incorrect with respect to Statement 3.
C) correct with respect to Statement 2, but incorrect with respect to Statements 1 and 3.
Q2. Dr. Jack Wolfe, a finance professor with the University of Tulsa asked his students to identify differences between a pension fund and a growth mutual fund. Kelly Musch, a student in Wolfe’s class, turned in a paper with two statements:
Statement 1: The pension fund is likely to have more flexibility to significantly change its asset allocation.
Statement 2: The pension fund could invest in the mutual fund, but the mutual fund could not invest in the pension fund.
When grading Musch’s paper, Dr. Wolfe should:
A) agree with Statement 1 and Statement 2.
B) disagree with Statement 1, but agree with Statement 2.
C) disagree with Statement 1 and Statement 2.
Q3. Which of the following CORRECTLY describes the primary source of invested funds to meet funding requirements for an endowment fund and an investment company?
Endowment Fund Investment Company
A) Own assets Own assets
B) Own assets Assets pooled
from investors
C) Assets pooled Assets pooled
from investors from investors | 
发表于 2009-3-5 11:23
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