CS 7646 MIDTERM EXAM QUESTIONS WITH
100% CORRECT ANSWERS!!
1 of 28
Term
Consider two hedge funds. Both of them have provided
equivalent positive cumulative returns. Which of the
following might be a valid reason for choosing HF1 over
HF2?
A) HF1 has a lower Sharpe ratio than its benchmark, but
HF2 has a higher Sharpe than its benchmark.
B) HF1 has a higher standard deviation of daily returns than
HF2.
C) HF1 has a lower standard deviation of daily returns than
HF2.
D) HF1 has a higher Bollinger value than HF2.
, Give this one a try later!
D is the best choice, because COL_1 looks like stock prices, COL_2
looks like some sort of sum of COL_3, which would correspond to the
daily return
B. a produces a random 2d array of size 3rx2c. a[1,:] refers to the 1th
row of a, all columns. b divides a by the 1th row of a, thus all values are
1 in the 1th row. b[1,1] is the value in the 1th row, 1th column, so it
would be 1.
A - lower Sharpe ratio is bad, so HF1 is not as good
B - higher stdev is usually a bad thing in HFs
C - lower stdev is good, so it must be this one
D - higher Bollinger value implies higher volatility, so not this one
Our regular dividend payment is $1 per year per share, and our discount
rate is 2%. The intrinsic value of the stock is $1/0.02, or $20. $20 x
1,000,000 shares outstanding is $20,000,000.
Don't know?
2 of 28
Term
Consider the following valuation factors of a company: It
owns 1000 cars valued at $20,000 each
It holds patents worth
$5,000,000 It owes
$5,000,000 in loans
It pays $1.00 per year per share in dividends starting in one
year The stock price is $60.00 per share
There are 1,000,000 shares
outstanding The discount rate is 2%
, Assume the price of the stock should settle to book value +
10%. What would you expect to happen to the price in the
future?
A)The price should stay about the same.
B) The price should go up.
C) The price should go down.
D) A shrubbery.
Give this one a try later!
Book value + 10% = $15,000,000 + 10% = $16,500,000. Market cap =
#Shares*Price = $60,000,000
C. The price would go down because it's heavily overvalued.
A - lower Sharpe ratio is bad, so HF1 is not as good
B - higher stdev is usually a bad thing in HFs
C - lower stdev is good, so it must be this one
D - higher Bollinger value implies higher volatility, so not this one
Our regular dividend payment is $1 per year per share, and our discount
rate is 2%. The intrinsic value of the stock is $1/0.02, or $20. $20 x
1,000,000 shares outstanding is $20,000,000.
C. The book value of the company is all tangible assets minus liabilities. It
owns
$20m in assets (cars), and owed $5m in loans. Therefore it's book value is
$15m.
Don't know?
3 of 28
, Definition
Market effect on a stock. If B goes up 1%, we'd expect stock
market to go up 1%
Give this one a try later!
Consider KNN, Linear Regression(LR), And Decision Tree(DT)learning
(using Correlation For Splitting). Which Option Correctly Lists The
Methods From Fastest To Slowest In Training Time?A) KNN, LR, DTB)
LR, KNN, DTC) DT, LR, KNND) LR, DT, KNN
Consider KNN, Linear Regression (LR), And Decision Tree (DT) Learning
(using Correlation For Splitting). Which Option Correctly Lists The
Methods From Fastest To Slowest In Query Time?A) KNN, LR, DTB)
LR, KNN, DTC) DT, LR, KNND) LR, DT, KNN
Alpha
Beta
Don't know?
4 of 28
Term
Book Value
Give this one a try later!
100% CORRECT ANSWERS!!
1 of 28
Term
Consider two hedge funds. Both of them have provided
equivalent positive cumulative returns. Which of the
following might be a valid reason for choosing HF1 over
HF2?
A) HF1 has a lower Sharpe ratio than its benchmark, but
HF2 has a higher Sharpe than its benchmark.
B) HF1 has a higher standard deviation of daily returns than
HF2.
C) HF1 has a lower standard deviation of daily returns than
HF2.
D) HF1 has a higher Bollinger value than HF2.
, Give this one a try later!
D is the best choice, because COL_1 looks like stock prices, COL_2
looks like some sort of sum of COL_3, which would correspond to the
daily return
B. a produces a random 2d array of size 3rx2c. a[1,:] refers to the 1th
row of a, all columns. b divides a by the 1th row of a, thus all values are
1 in the 1th row. b[1,1] is the value in the 1th row, 1th column, so it
would be 1.
A - lower Sharpe ratio is bad, so HF1 is not as good
B - higher stdev is usually a bad thing in HFs
C - lower stdev is good, so it must be this one
D - higher Bollinger value implies higher volatility, so not this one
Our regular dividend payment is $1 per year per share, and our discount
rate is 2%. The intrinsic value of the stock is $1/0.02, or $20. $20 x
1,000,000 shares outstanding is $20,000,000.
Don't know?
2 of 28
Term
Consider the following valuation factors of a company: It
owns 1000 cars valued at $20,000 each
It holds patents worth
$5,000,000 It owes
$5,000,000 in loans
It pays $1.00 per year per share in dividends starting in one
year The stock price is $60.00 per share
There are 1,000,000 shares
outstanding The discount rate is 2%
, Assume the price of the stock should settle to book value +
10%. What would you expect to happen to the price in the
future?
A)The price should stay about the same.
B) The price should go up.
C) The price should go down.
D) A shrubbery.
Give this one a try later!
Book value + 10% = $15,000,000 + 10% = $16,500,000. Market cap =
#Shares*Price = $60,000,000
C. The price would go down because it's heavily overvalued.
A - lower Sharpe ratio is bad, so HF1 is not as good
B - higher stdev is usually a bad thing in HFs
C - lower stdev is good, so it must be this one
D - higher Bollinger value implies higher volatility, so not this one
Our regular dividend payment is $1 per year per share, and our discount
rate is 2%. The intrinsic value of the stock is $1/0.02, or $20. $20 x
1,000,000 shares outstanding is $20,000,000.
C. The book value of the company is all tangible assets minus liabilities. It
owns
$20m in assets (cars), and owed $5m in loans. Therefore it's book value is
$15m.
Don't know?
3 of 28
, Definition
Market effect on a stock. If B goes up 1%, we'd expect stock
market to go up 1%
Give this one a try later!
Consider KNN, Linear Regression(LR), And Decision Tree(DT)learning
(using Correlation For Splitting). Which Option Correctly Lists The
Methods From Fastest To Slowest In Training Time?A) KNN, LR, DTB)
LR, KNN, DTC) DT, LR, KNND) LR, DT, KNN
Consider KNN, Linear Regression (LR), And Decision Tree (DT) Learning
(using Correlation For Splitting). Which Option Correctly Lists The
Methods From Fastest To Slowest In Query Time?A) KNN, LR, DTB)
LR, KNN, DTC) DT, LR, KNND) LR, DT, KNN
Alpha
Beta
Don't know?
4 of 28
Term
Book Value
Give this one a try later!
