FINANCIAL MODELING ACTUAL EXAM |80 COMPLETE AND GRADED QUESTIONS
AND ANSWERS 2026 LATEST UPDATED | 100% GRADED CORRECT | 100%
GUARANTEED TO PASS | GET A+
1. 1.1 In Excel, The NXNPV allows for negative interest rates and returns
the net present value of an investment: False
The NPV and XNPV functions calculate net present value, but XNPV is defined
by using actual dates, not by allowing negative interest rates as a defining
feature.
2. 1.2 A typical pension problem graph has a steep positive slope in the
accumulation phase and a negative slope in the decumulation phase: True
The typical pension wealth profile increases during the accumulation phase
and decreases during the decumulation phase
3. 1.3 The covariance between assets in an optimal portfolio influences the
steepness of that portfolio in the capital allocation line.: True
,The covariance between assets affects portfolio risk and therefore
determines the slope of the capital Allocation Line
4. 1.4 Any two envelope portfolios will determine the entire envelope
frontier. Moreover in excel, we can use data table to discover this envelope
frontier including short sale constraints.: False
The efficient frontier is generated by many portfolios, not by any arbitrary
two envelope portfolios
5. 1.5 To construct the sim variance-covariance matrix, all that is needed
are the historical returns on the individual assets on the market: True
The single index Model constructs the variance-covariance matrix using
returns (historical) on individual assets and the market
6. 1.6 You use the shrinkage method to create a variance- covariance
matrix and find that it performs the best among different variance-
covariance alternatives. This indicates that it will continue to perform well in
future out-of-sample tests.: False
, The best in-sample variance-covariance matrix does not necessarily perform
best out of sample
7. 1.7 An investor willing to short-sell is able to obtain a higher Sharpe ratio
than an investor who dislikes short-selling: True
The allowance of short-selling expands the opportunity set and can increase
the maximum attainable Sharpe ratio.
8. 1.8 Incorporating investor opinions requires vector addition and the
computation of the constant correlation coefficient: False
The incorporation of investor is done by adjusting expected returns, not by
computing a constant correlation coefficient.
9. 1.9 you can incorporate investor opinions to improve the GMVP: False
The Global minimum variance portfolio (GMVP) depends only on variances
and covariances, not on investor views or expected returns.
AND ANSWERS 2026 LATEST UPDATED | 100% GRADED CORRECT | 100%
GUARANTEED TO PASS | GET A+
1. 1.1 In Excel, The NXNPV allows for negative interest rates and returns
the net present value of an investment: False
The NPV and XNPV functions calculate net present value, but XNPV is defined
by using actual dates, not by allowing negative interest rates as a defining
feature.
2. 1.2 A typical pension problem graph has a steep positive slope in the
accumulation phase and a negative slope in the decumulation phase: True
The typical pension wealth profile increases during the accumulation phase
and decreases during the decumulation phase
3. 1.3 The covariance between assets in an optimal portfolio influences the
steepness of that portfolio in the capital allocation line.: True
,The covariance between assets affects portfolio risk and therefore
determines the slope of the capital Allocation Line
4. 1.4 Any two envelope portfolios will determine the entire envelope
frontier. Moreover in excel, we can use data table to discover this envelope
frontier including short sale constraints.: False
The efficient frontier is generated by many portfolios, not by any arbitrary
two envelope portfolios
5. 1.5 To construct the sim variance-covariance matrix, all that is needed
are the historical returns on the individual assets on the market: True
The single index Model constructs the variance-covariance matrix using
returns (historical) on individual assets and the market
6. 1.6 You use the shrinkage method to create a variance- covariance
matrix and find that it performs the best among different variance-
covariance alternatives. This indicates that it will continue to perform well in
future out-of-sample tests.: False
, The best in-sample variance-covariance matrix does not necessarily perform
best out of sample
7. 1.7 An investor willing to short-sell is able to obtain a higher Sharpe ratio
than an investor who dislikes short-selling: True
The allowance of short-selling expands the opportunity set and can increase
the maximum attainable Sharpe ratio.
8. 1.8 Incorporating investor opinions requires vector addition and the
computation of the constant correlation coefficient: False
The incorporation of investor is done by adjusting expected returns, not by
computing a constant correlation coefficient.
9. 1.9 you can incorporate investor opinions to improve the GMVP: False
The Global minimum variance portfolio (GMVP) depends only on variances
and covariances, not on investor views or expected returns.
