1. Josh LeBlanc, a CFA charterholder, is an investment analyst for a small stock brokerage firm. He wants to acquire and maintain knowledge about applicable laws, rules, and regulations relating to his professional activities. According to the CFA Institute Standards of Professional Conduct, which of the following ways is least likely to meet compliance procedures?
a. Do not Engage in Practices that Distort Market Prices or Artificially Inflate Trading Volume
b. Keep Informed about Changes in Applicable Laws, Rules, and Regulations
c. Refrain from Acting or Causing Others to Act on Material, Private Information
d. Rely on Past Practices Followed within his Firm
e. Review Written Compliance Procedures on a Regular Basis
2. The behavioral phenomenon that investors receive less joy from profits than they do pain from losses of equal magnitude is known as:
a. Herding
b. Momentum
c. Prospect Theory
d. Relative Strength
e. Representativeness
3. Assuming volume is unchanged, which of the following execution algorithms will increase buy order size if a security's price declines?
a. Adaptive Shortfall, Aggress in the Money
b. Adaptive Shortfall, Passive in the Money
c. Percent of Volume
d. Time Weighted Average Price (TWAP)
e. Volume Weighted Average Price (VWAP)
4. Which of the following is NOT true about high frequency quote and trading frequency and periodicity?
a. High Frequency Traders (HFTs) Trade Less than Expected when compared to non-HFTs at 0 Second Time Stamps within Each Minute
b. High Frequency Traders Trade More than Expected when compared to non-HFTs at 0 Millisecond Timestamps within Each Second
c. High Frequency Traders Trade More than non-HFTs in General
d. Most Quotes and Trades Occur at the 0 Millisecond Timestamp within Each Second
e. Most Quotes and Trades Occur at the 0 Second Timestamp within Each Minute
5. Which of the following portfolio performance ratios considers the shape of a portfolio s return distribution rather than simply its mean and variance?
a. Information Ratio
b. Omega Ratio
c. Sharpe Ratio
d. Sortino Ratio
e. Treynor Ratio