Adapt Round 6

Front 1

Which have shorter maturities, notes or debentures?

Back 1

Notes

Front 2

What is new debt that has lower seniority than existing debenture issues called?

Back 2

Subordinated debenturetrue

Front 3

True or False? In the event of bankruptcy, bond holders for mortgage bonds and asset-backed bonds have a direct claim to specific assets which have been pledged as collateral?

Back 3

True

Front 4

Does the median mutual fund have a positive value added or does it destroy value?

Back 4

The median mutual fund destroys value

Front 5

True or false? Fund size is a strong predictor of the future value added by fund managers

Back 5

True

Front 6

Correctly priced individual assets can be plotted on what line?

Back 6

The security market line (SML)

Front 7

What is the slope of the SML?

Back 7

Market risk premium

Front 8

The intercept of the best fit line formed by plotting the excess returns of an asset on the excess returns of the market is the stock’s what?

Back 8

Alpha

Front 9

Standard lookback options are referred to as lookback options with what kind of strike price?

Back 9

Floating strike price

Front 10

Extrema lookback options are sometimes referred to as lookback options with what kind of strike price?

Back 10

Fixed

Front 11

If the market portfolio is not efficient, then not all stocks will lie on the what line?

Back 11

SML

Front 12

Small stocks have small what?

Back 12

Small market capitalization

Front 13

Big stocks have large what?

Back 13

Large market capitalization

Front 14

If a stock has a positive alpha, will the stock be above or below the SML?

Back 14

Above the SML

Front 15

If a stock has a negative alpha, it is above or below the SML

Back 15

Below the SML

Front 16

Do small stocks tend to have positive or negative alphas?

Back 16

Positive

Front 17

Do small stocks tend to be above or below the SML

Back 17

Above

Front 18

Do big stocks tend to be above or below the SML?

Back 18

Below

Front 19

What kind of stocks have high book to market ratios?

Back 19

Value stocks

Front 20

What kind of stocks have low book to market ratios?

Back 20

Growth stocks

Front 21

Do value stocks tend to have positive or negative alphas?

Back 21

Positive alphas

Front 22

Do value stocks tend to be above or below the SML?

Back 22

Above the SML

Front 23

Do growth stocks tend to have positive or negative alphas?

Back 23

Negative alphas

Front 24

Do growth stocks tend to be above or below the SML?

Back 24

Below

Front 25

True or false? Under the CAPM, all investors will invest along the efficient frontier of risky investments?

Back 25

False

Front 26

Under the CAPM, all investors will invest along what line?

Back 26

The Capital Market Line

Front 27

Angel financing often occurs at such an early stage in the business that it is difficult to assess a value for the firm. Angel investors often circumvent this problem by holding what?

Back 27

Convertible notes

Front 28

A venture capital firm is what kind of partnership that specializes in raising money to invest in the private equity of young firms

Back 28

Limited partnership

Front 29

A venture capital firm is run by what kind of partners?

Back 29

General partners

Front 30

Is the dollar coupon of TIPS fixed or varied?

Back 30

Varied

Front 31

Is the coupon rate for TIPS fixed or varied?

Back 31

Fixed

Front 32

If the issue is a success and the price rises above the IPO offer price, the underwriters will exercise what provision?

Back 32

Greenshoe Provision

Front 33

What is another name for the Greenshoe Provision?

Back 33

Over-allotment allocation

Front 34

If the stock pays discrete dividends, then the volatility of the what should be used as the volatility parameter?

Back 34

Volatility of the prepaid forward price

Front 35

Mortgage guaranty insurance is most often purchased for loans that are considered higher or lower risk?

Back 35

Higher risk

Front 36

A mortgage guaranty insurance contract is what kind of option with payment contingent on borrower default?

Back 36

Put option

Front 37

One reasonable argument that can be made against a presumed market anomaly is that anomalies found in past data cannot be assumed to persist into when?

Back 37

The future

Front 38

What can yield false market anomalies because if you dig deep enough into a large data set, you can eventually find unusual patterns?

Back 38

Data mining

Front 39

Should the weights on equity and debt be calculated based on market values or book values?

Back 39

Market values

Front 40

What is the formula for liquidation preference?

Back 40

Multiplier for liquidation preference • number of shares • price per share

Front 41

When they say this phrase, what is it referring to? For delta-hedging at time 0 one unit of the call option with shares of the stock, the cost of stock shares is 61.32

Back 41

Delta• S