solution
solution.
Which of the following statement is correct?
(A) OTC trade is more secured than exchanges
(B) OTC trade requires the use of margin accounts
(C) OTC trade offers more flexibility
(D) OTC trade is illegal for derivatives
(E) Futures are traded in both OTC and exchanges
The the assets are, the higher the diversification benefits.
(A) more positively correlated
(B) more negatively correlated
(C) uncorrelated the assets are
(D) more risky
(E) more the weights are on the riskier asset
The purpose of portfolio management is to
(A) earn maximum return at any risk
(B) earn the highest return by taking on the highest risk
(C) earn the highest return for a given level of risk
(D) find the lowest risk and return
(E) find the lowest risk for a given level of return
Which of the following statement on the global minimum variance portfolio is true?
(A) It is derived from maximizing the standard deviation of the portfolio
(B) It earns the highest return for the given assets in the portfolio
(C) It is the most efficient portfolio for the given assets
(D) Points above the global minimum variance portfolio are efficient
(E) Points below the global minimum variance portfolio are efficient
Which of the following statement is true?
(A) Margin call is triggered when margin account falls below initial margin requirement
(B) Margin call is triggered when margin account falls below maintenance margin
(C) Margin call is triggered when maintenance margin falls below margin account
(D) Margin call is triggered when maintenance margin falls below initial margin requirement
(E) None of the above statement is true
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