Equity Investments - Equity Investments Section 1

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47. An index that contains securities with more than 90% of the market‟s total value is most likely a:

  • Option : A
  • Explanation : A broad market index tries to represent the entire market and usually contains more than 90% of the market‟s total value.
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48. An example of a style index is an:

  • Option : c
  • Explanation : Style indices represent groups of securities classified according to market capitalization, value, growth, or a combination of these characteristics.
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49. On the basis of market, fixed income indices can be least likely classified as:

  • Option : c
  • Explanation : On the basis of market, fixed income indices are classified as global, regional and country or currency zone.
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50. Which of the following is least likely true with regards to hedge fund indices?

  • Option : c
  • Explanation : Performance reporting is voluntary. Hedge funds with poorer performance may be less likely to report their performance to the database, which make the returns biased upwards.
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