Insurance and Risk Management Paper 17

1

A mutual fund manager shifts part of his portfolio from long-dated bonds to money market instruments even though yields are unchanged. Most likely he is expecting:






2

A retirement annuity is particularly attractive to someone who has:






3

A share with a β-coefficient of 0.9 has a rate of return of 16%, when the whole market return is 17%. What return should it produce if the risk free rate rises from 7% to 8%, ceteris paribus.






4

A sudden demand by depositors for notes and coin is an example of:






5

A treasury bill which matures in 62 days for £250,000 is currently trading at 248,000. The rate of discount on this bill is:






6

A unit trust fund is established with assets of £200m divided into 150m units. The value of the underlying assets rises to £250m. The value of each unit is:






7

According to the Fisher hypothesis, the nominal rate of interest consists of:






8

According to the liquidity preference theory of interest, an increase in uncertainty, other things being equal, will:






9

According to the policy irrelevance theorem, why is policy irrelevant?






10

According to the rational expectations hypothesis:






Result

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