The index weighting that results in portfolio weights shifting away from securities that have increased in relative value (e,g,, decrease in book-to-market) toward securities that have fallen in relat
A. Equal weighting.
B. Fundamental weighting.
C. float-adjusted market-capitalization weighting.
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Compared with investment in an open-ended index mutual fund, which of these is least likely a benefit to an investor in an index exchange traded fund (ETF) on the same index?
A. Lower bid-ask spreads
B. Managing the timing of capital gains
C. Ability to sell short and buy on margin
A buyer would face the greatest risk of default with:
A farmer making physical delivery on a short soybean futures position.
B. An investment bank making cash settlement on a short euro futures position.
C. A multinational firm making cash settlement on a short U.S. dollar forward contract.
In an effort to influence the economy, a central bank conducted open market activities by selling government bonds. This implies that the central bank is most likely attempting to:
A. Contract the economy by reducing bank reserves.
B. Expand the economy through a lower policy interest rate.
Contract the economy through a lower policy interest rate.
Robin Herring, CFA, is a government bond research analyst at an independent credit rating agency. A competitor credit rating agency just downgraded the bonds of a government Herring follows. Herring n
A. Fair Dealing
B. Communication with Clients
C. Diligence and Reasonable Basis