You are considering a portfolio only of long positions not involving leverage and have the following information:
Stock | Expected Return | Variance | Correlation1 |15% | 100 | R1,2 = 0.6
2 |18% | 64 | R1,3 = 0.2 3 |24% | 400 | R2,3 = -1.0
Which of the following statements is supported by the above data?

• A.The highest expected return for any portfolio using these three stocks is 15%.
• B.The boundaries for expected return for any portfolio using these three stocks are from 0% to 24%.
• C.The expected return on the portfolio would be 19%, with equal weights in each of the three stocks.

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Nonrecurring items are:

• A.Transactions and events that are unusual in nature and infrequent in occurrence, immaterial in amount.
• B.Recurring items that represent income but fail to meet revenue recognition requirements.
• C.Non-typical items, usually losses, such as extraordinary items, discontinued operations, or accounting changes.

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The significance level in hypothesis testing refers to the probability that we will:

• A.Reject the null when it is true.
• B.Accept the alternative when it is true.
• C.Fail to reject the null when it is false.

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Max Factoring purchased a four-year bond with an annual coupon of 9%. By how much does the bond price change if the term structure shifts up in a parallel manner by 2%? Assume a flat term structure of interest rates at 7%.

• A.-$67.74
• B.$67.74
• C.-$34.56

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Christina Boyer no longer pays her dues to the CFA Institute and is no longer a member, although she had successfully acquired her charter ten years ago. She no longer practices as a financial analyst and has been a homemaker for the past three years. At a dinner honoring her as the Volunteer of the Year for the local high school girl's softball team, the brochure has printed her name as Christina Boyer, CFA, and is introduced as such by the President of the softball league.

• A.No standard has been violated since Christina had successfully performed all the charter requirements ten years ago.
• B.Christina has violated Standard VII by using the designation CFA after her name.
• C.The brochure was not published by Christina so she can claim that no violation on her part has occurred.

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