QUIZ 1

A stress test: (check all that apply)

A 5% 3-month Value At Risk (VaR) of $1 million represents:

In the Capital Asset Pricing Model (CAPM), a measure of systematic risk is captured by:

Market (or systematic) risk ___________ whereas idiosyncratic risk

Why might an investor not normally invest large sums of money into Walmart or Apple stock?

Why is the normal distribution not a good model of some financial data?
QUIZ 2
Which of these best describes risk pooling?

Which of the following was NOT a factor which led to the proliferation of life insurance?

What happens in the United States if your insurance company goes bankrupt?
What problem does the US Affordable Care Act (“Obamacare”) attempt to address and how does it
do so

One of the main reasons why many homeowners did not have flood insurance before the advent of
Hurricane Katrina in 2005 was
QUIZ 3
Under the “Don’t put all your eggs in one basket” analogy, the eggs represent individual investments
and the basket represents the overall investment portfolio. Spreading your “eggs” around allows you
to

Risk diversification can be better achieved: (check all that apply)

Short selling, which is defined as the sale of a security that the seller has borrowed, is motivated by
the belief that:
The expected return of a portfolio is computed as ___________ and the standard deviation of a
portfolio is

An efficient portfolio is a combination of assets which:

QUIZ 4
While discussing what the future of financial markets will look like, the following arguments were
mentioned (check all that apply):

In his work, David Moss describes how investors’ psychology favored limited liability after the early
19th century New York experiment. In fact, the comparison between investors’ psychologies in the
context of unlimited liability and lottery tickets is:

The introduction of inflation indexed debt was motivated by: (check all that apply)
Why did Chile introduce the Unidad de Fomento ?

The concept of equity-protected mortgages consists in

QUIZ 5
In the S&P 500 forecasting exercise, many subjects seemed to be subject to the representativeness
heuristic. This concept of behavioral finance posits that

An efficient market is defined as one in which:

The Dividend Discount Model (or Gordon Growth Model) can be stated as follows.

Let the investor’s discount rate be equal to r .If earnings equal dividends, and if dividends grow at
the long-run rate g, then the price of the stock P can be written as follows:

Human judgment and experience can play a role in the advent of stock market crash because:
QUIZ 6
Which of the following best describes the “invisible hand”?

What problems does prospect theory solve? (check all that apply)

What is the wishful thinking bias?

Ricardo thinks that, since society seems similar to what it was in the late 1920s, a second Great
Depression is coming soon. To which cognitive bias is Ricardo falling victim?

What is Newcomb’s paradox?

Which of the following is NOT a common trait of somebody with Antisocial Personality Disorder?
QUIZ 7