1. Asset allocation is the:

A. selection of specific securities within a particular class or indusrty

B. division of a pruchase price between a cash payment and a margin loan

C. division of a portfolio into short and long positions

D. distribution of investment funds among various broad asset classes

E. dividing of assets into those that are hypothecated and those that are not

2. A tax exempt money market fund has an annual return of 4.63 percent. What is your equivalent taxable rate if you are in a 32 percent marginal tax bracket?

A. 3.15 percent

B. 3.38 percent

C. 6.11 percent

D. 6.59 percent

E. 6.81 percent