WEALTH MANAGEMENT EXAM I QUESTIONS AND ANSWERS
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
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
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
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
