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FINA 3315 EXAM 2 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
Which of the following types of risk affect bonds?
I - call risk
II - business risk
III - purchasing power risk
IV - liquidity risk - correct answer-I, II, III and IV
Long term treasury bonds are free of default risk, but not
A - call risk
B - liquidity risk
C - business risk
D - interest rate risk - correct answer-D - interest rate risk
Which of the following climates would be most favorable for an
aggressive bond strategy?
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A - The 6 month Treasury bill is at 2% , the 10 year Treasury
note is at 3%, GDP is growing at a sluggish pace.
B - A flat yield curve.
C - A downward sloping yield curve.
D - A steeply upward sloping yield curve. - correct answer-C - A
downward sloping yield curve.
The required return on a bond is equal to
A - the real rate plus a risk premium.
B - the risk−free rate plus a risk premium plus an expected
inflation premium.
C - the real rate of return plus a risk premium plus an expected
inflation premium.
D - the real rate of return plus the coupon rate plus an inflation
rate. - correct answer-C - the real rate of return plus a risk
premium plus an expected inflation premium.
Interest rates in the U.S. and in major foreign economies
A - tend to move in the same direction.
B - tend to move in opposite directions.
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C - are uncorrelated or very weakly correlated.
D - are the same when adjusted for inflation. - correct answer-A
- tend to move in the same direction.
Two mutual funds are quoted as follows.
Fund A NAV 17.13 Offer price 18.18
Fund B NAV 19.03 Offer price 19.03
Given these quotes, which of the following is true?
A - Both funds are no−load funds.
B - Fund A is a no−load fund.
C - Fund B is a no−load fund.
D - Both funds are load funds. - correct answer-C - Fund B is a
no−load fund.
Returns on exchange traded funds may come from
I. capital gains.
II. dividends.
III. increases in the fund's premium.
IV. decreases in the fund's discount. - correct answer-I and II
only
FINA 3315 EXAM 2 2026
ACTUAL QUESTIONS WITH
VERIFIED ANSWERS.
Which of the following types of risk affect bonds?
I - call risk
II - business risk
III - purchasing power risk
IV - liquidity risk - correct answer-I, II, III and IV
Long term treasury bonds are free of default risk, but not
A - call risk
B - liquidity risk
C - business risk
D - interest rate risk - correct answer-D - interest rate risk
Which of the following climates would be most favorable for an
aggressive bond strategy?
, Page | 2
A - The 6 month Treasury bill is at 2% , the 10 year Treasury
note is at 3%, GDP is growing at a sluggish pace.
B - A flat yield curve.
C - A downward sloping yield curve.
D - A steeply upward sloping yield curve. - correct answer-C - A
downward sloping yield curve.
The required return on a bond is equal to
A - the real rate plus a risk premium.
B - the risk−free rate plus a risk premium plus an expected
inflation premium.
C - the real rate of return plus a risk premium plus an expected
inflation premium.
D - the real rate of return plus the coupon rate plus an inflation
rate. - correct answer-C - the real rate of return plus a risk
premium plus an expected inflation premium.
Interest rates in the U.S. and in major foreign economies
A - tend to move in the same direction.
B - tend to move in opposite directions.
, Page | 3
C - are uncorrelated or very weakly correlated.
D - are the same when adjusted for inflation. - correct answer-A
- tend to move in the same direction.
Two mutual funds are quoted as follows.
Fund A NAV 17.13 Offer price 18.18
Fund B NAV 19.03 Offer price 19.03
Given these quotes, which of the following is true?
A - Both funds are no−load funds.
B - Fund A is a no−load fund.
C - Fund B is a no−load fund.
D - Both funds are load funds. - correct answer-C - Fund B is a
no−load fund.
Returns on exchange traded funds may come from
I. capital gains.
II. dividends.
III. increases in the fund's premium.
IV. decreases in the fund's discount. - correct answer-I and II
only
