Introduction to Passive investing Quiz Copy

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Question 1 of 10

1. Question
What do you minimize as part of passive investing?
- Returns
- Buying and selling of securities
- The number of investments
- The number of times you check your investment
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Question 2 of 10

2. Question
Which of the following statements is incorrect?
- Passive investing is generally more expensive than Active investing
- Market efficiency should be considered in deciding between active and passive management
- Passive investing can be done through the use of derivatives
- Globally, passive investing is growing faster than active management
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Question 3 of 10

3. Question
One of the arguments against Passive investing is
- Asset bubbles can be considered to be a by-product of passive investing
- It is more expensive than active investing
- The majority of Asset managers will outperform their benchmarks
- It requires more skill and resources than active investing
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Question 4 of 10

4. Question
Which one of the following statements is correct
- Mutual fund shares can be traded at any time during the day or night
- Mutual funds can only be used under a passive investing strategy
- Pension funds in Botswana may use derivatives for risk management purposes
- Passive investing is not possible with bonds
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Question 5 of 10

5. Question
Which one of the following is incorrect?
- Full replication in index investing means that manager holds all securities represented by the index in weights that closely match the index weights.
- Stratified sampling in index investing means that managers hold sub-sets of securities sampled from distinct sub-groups, or strata, of stocks in the index.
- Optimization sampling in index investing means finding the optimum mix of assets that maximizes tracking error of the fund.
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Question 6 of 10

6. Question
Choose the correct statement. Empirical evidence suggests that
- Most active asset managers do outperform the market
- Most active asset managers underperform the market after fees
- Most passive managers outperform the market
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Question 7 of 10

7. Question
One of the key considerations in deciding between active and passive investing is
- How other investors are choosing to invest
- The size of the investors’ assets
- How efficient is the investing market under consideration
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Question 8 of 10

8. Question
For well-developed and comprehensively reported markets,
- it is easier to generate market beating performance
- it is more difficult to generate market beating performance
- more new investors are choosing to invest actively
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Question 9 of 10

9. Question
One of the disadvantages of investing passively with a mutual fund is
- mutual fund shares can only be traded once a day
- mutual fund shares can be traded anytime
- mutual funds are generally cheaper than ETF’s
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Question 10 of 10

10. Question
Which of the following best describes an overlay position?
- Adding a position to a portfolio using another ETF
- A derivative position taken to readjust the fund’s exposure to its stated target
- A position taken to increase a fund’s exposure beyond its target
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Introduction to Passive investing Quiz Copy

Introduction to Passive investing Quiz Copy

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