1. What is the primary objective of investment management?

a) Maximizing shareholder wealth

b) Maximizing company profits
c) Minimizing market risk
d) Maximizing portfolio diversification

2. Which of the following is NOT a common investment asset class?

a) Stocks
b) Bonds
c) Commodities
d) Insurance

3. What is the measure of the degree of uncertainty or risk of an investment?

a) Expected return
b) Volatility
c) Liquidity
d) Duration

4. What is the concept of diversification in investment management?

a) Concentrating investments in a single asset
b) Spreading investments across various assets
c) Timing the market to minimize risk
d) Investing solely in high-risk assets

5. What does the Sharpe ratio measure?

a) Return per unit of risk
b) Market volatility
c) Asset liquidity
d) Duration of investments

6. What is the term used to describe the ease with which an investment can be converted into
cash?
a) Volatility
b) Liquidity
c) Duration
d) Solvency

7. What is the time value of money?

a) The value of money increases with time
b) The value of money decreases with time
c) The value of money remains constant over time
d) The value of money fluctuates unpredictably

8. What is the role of an investment manager?

 a) To guarantee high returns on investments
b) To minimize shareholder wealth
c) To make investment decisions on behalf of clients
d) To ensure short-term profits for the company

9. Which of the following is NOT a factor considered in the fundamental analysis of stocks?
a) Company financials
b) Economic indicators
c) Market sentiment
d) Technical indicators

10. What does the term "alpha" represent in investment management?

a) Market risk
b) Benchmark return
c) Risk-adjusted return
d) Portfolio volatility

11. Which investment style focuses on buying undervalued assets and holding them for the long
term?
a) Growth investing
b) Value investing
c) Momentum investing
d) Arbitrage investing

12. What is a hedge fund?

a) A fund that invests only in stocks
b) A fund that invests in low-risk assets
c) A private investment fund that uses various strategies to generate returns
d) A fund guaranteed by the government

13. What is the primary risk associated with investing in fixed-income securities?
a) Market risk
b) Inflation risk
c) Liquidity risk
d) Credit risk

14. What is the primary difference between active and passive investment management?
a) Active management aims to outperform the market, while passive management aims to
match market returns.
b) Active management involves fewer risks than passive management.
c) Passive management requires more frequent trading than active management.
d) Passive management is only suitable for high-net-worth investors.

15. What is the formula for calculating the compound annual growth rate (CAGR)?
 a) [(Ending Value - Beginning Value) / Beginning Value] × 100
b) [(Ending Value - Beginning Value) / Ending Value] × 100
c) [(Ending Value / Beginning Value)^(1/n) - 1] × 100
d) [(Ending Value / Beginning Value)^(1/n)] × 100

16. What is the term used to describe the process of adjusting a portfolio to maintain desired
asset allocation and risk levels?
a) Rebalancing
b) Hedging
c) Arbitraging
d) Speculating

17. Which of the following statements is true regarding the Efficient Market Hypothesis (EMH)?
a) It states that all markets are always perfectly efficient.
b) It suggests that it is possible to consistently outperform the market.
c) It asserts that stock prices reflect all available information.
d) It argues that market anomalies are common and predictable.

18. What is the primary goal of portfolio optimization?

a) Maximizing returns without considering risk
b) Minimizing returns while maximizing risk
c) Achieving the highest possible return for a given level of risk
d) Achieving the lowest possible return for a given level of risk

19. What does the term "beta" represent in investment management?

a) Market risk
b) Benchmark return
c) Risk-adjusted return
d) Portfolio volatility

20. Which of the following factors is NOT considered in the Modern Portfolio Theory (MPT)?
a) Risk
b) Return
c) Liquidity
d) Correlation between assets