A portfolio manager has been asked to take the risk related to the default of two securities A and B. She has to make a large payment if, and only if, both A and B default. For taking this risk, she will be compensated by receiving a fee. What can be said about this fee?()

A fixed income portfolio manager is evaluating investments in the mortgage

market but is concerned about prepayment risk. The security that willmost likely

minimize prepayment risk is:

A. a mortgage passthrough security.

B. a portfolio of interest-only mortgage loans.

C. tranche B of a collateralized mortgage obligation.

Consider a U.S. portfolio manager who holds a portfolio of French stocks currently worth €10 million. In order to hedge against a potential depreciation of the euro, the portfolio manager proposes to sell December futures contracts on the euro that currently trade at $1/€ and expire in two months. The spot exchange rate is currently $1.1/€. A month later, the value of the French portfolio is €10,050,000 and the spot exchange rate is $1.05/€, while the futures exchange rate is $0.95/€. a. Evaluate the effectiveness of the hedge by comparing the fully hedged portfolio return with the unhedged portfolio return. b. Calculate the return on the portfolio, assuming a 35 percent hedge ratio.

A.A portfolio manager accepts free trades from XYZ for her personal account for directing the portfolio’s trades to XYZ. She does not inform her manager since there is no cash involved.

B.After informing his manager, a portfolio manager accepts money for giving a broker information relating to a client’s financial standing.

C.A portfolio manager is offered a free vacation to increase performance. At the end of the year performance is up and the manager accepts the vacation after info rming his manager of the fact.

D.A portfolio manager is unexpectedly offered a vacation at year-end from a client who was pleased with their portfolio’s performance. The manager accepts the vacation after informing her manager of the fact.

A.1.84%.

B.3.70%.

C.4.34%.

A.Equalthemarketsperformance.

B.Outperformthemarket.

C.Underperformthemarket.

A.Enterapay-fixed,receive-floatingrateswap.

B.Sellcorporatebondsandbuytreasurybonds.

C.Buycorporatebondsandselltreasurybonds.

A、rebalancing.

B、Tactical asset allocation.

C、Strategic asset allocation.

A、Suitability

B、Communications with Clients

C、Independence and Objectivity

A、Both of these Standards.

B、Neither of these Standards.

C、Only one of these Standards.

A.98.65

B.101.36

C.106

A、Consider the suitability of the portfolio relative to the clients needs and situation.

B、Make investment decision that is consistent with the stated objectives and constraints of the fund.

C、Make investment decisions in the context of the clients total portfolio.