Wealth Management Exam I 2026
Questions and Answers Graded A+
the S+P 500 index is a price weighted index - Correct answer-false
The Dow Jones Industrial Average is a market cap index - Correct answer-false
the NASDAQ is a price weighted-index - Correct answer-False
Modern portfolio theirt was originally advanced by:
a. Harry Markowitz and the identificiation of standard deviation as a measure of
risk
b. William Sharpe and the capital asset pricing model
c. Eugene Fama and the efficicent markets hypoithesis
d. Stephen Ross and the arbitrage pricing theory - Correct answer-a. Harry
Markowitz and the identification of standard deviation as a measure of risk
©COPYRIGHT 2026, ALL RIGHTS RESERVED 1
, The behavioral finance aspect that most likely offers a unique and reasonable
explanation for the persistence of the equity premium puzzle is:
a. emotional bias
b. bounded rationality
c. Myopic loss aversion
d. Heuristic security valuation - Correct answer-C. Myopic loss aversion
A large firm announces it has hired a design company to change its corporate logo.
The new logo will be shown publicly for the first time the following day.
Shareholders react by bidding up the shares by 10% over the relevant benchmark.
No other information about this firm is released. The shareholder reaction can best
be described as:
a. anchoring
b. representativeness
c. cognitive dissonance
d. mental accounting - Correct answer-b. representativeness
©COPYRIGHT 2026, ALL RIGHTS RESERVED 2
Questions and Answers Graded A+
the S+P 500 index is a price weighted index - Correct answer-false
The Dow Jones Industrial Average is a market cap index - Correct answer-false
the NASDAQ is a price weighted-index - Correct answer-False
Modern portfolio theirt was originally advanced by:
a. Harry Markowitz and the identificiation of standard deviation as a measure of
risk
b. William Sharpe and the capital asset pricing model
c. Eugene Fama and the efficicent markets hypoithesis
d. Stephen Ross and the arbitrage pricing theory - Correct answer-a. Harry
Markowitz and the identification of standard deviation as a measure of risk
©COPYRIGHT 2026, ALL RIGHTS RESERVED 1
, The behavioral finance aspect that most likely offers a unique and reasonable
explanation for the persistence of the equity premium puzzle is:
a. emotional bias
b. bounded rationality
c. Myopic loss aversion
d. Heuristic security valuation - Correct answer-C. Myopic loss aversion
A large firm announces it has hired a design company to change its corporate logo.
The new logo will be shown publicly for the first time the following day.
Shareholders react by bidding up the shares by 10% over the relevant benchmark.
No other information about this firm is released. The shareholder reaction can best
be described as:
a. anchoring
b. representativeness
c. cognitive dissonance
d. mental accounting - Correct answer-b. representativeness
©COPYRIGHT 2026, ALL RIGHTS RESERVED 2
