True or false. No explanation is required. 1.Over the last 5 years, the Russell

ID: 2383168 • Letter: T

Question

True or false. No explanation is required.

1.Over the last 5 years, the Russell small stock index has consistently out-performed the Russell large stock index.

2.The S&P400 index is composed of the 400 largest stocks in the S&P500.

3.Over the last decade, in the U.S., there were more preferred stock issues than common stock issues.

4.The yield curve almost always slopes upward.

5.An asset that last year had a Sharpe ratio = 0 would have had acceptable performance.

6.An equity that last year had an a = 0 would have had acceptable performance.

7.More attractive CEOs on average will receive higher total wages.

8.On average, a zero-coupon bond will increase in value as it approaches maturity.

9.On average, a coupon bond will increase in value as it approaches maturity.

10.A bond with a coupon rate higher than its yield is worth more than its par value.

11.Real interest rates are generally higher than nominal interest rates.

12.REITs pay almost no taxes.

13.If the S&P500 index had a positive return today, we would expect that a US investment grade bond index would also have a positive return today.

14.A floating rate mortgage generally has a higher interest rate than a fixed rate mortgage.

15.The Fisher effect implies that the 10-year government bond rate is roughly inflation plus a constant.

1. True.

2. false

3. false

4. true

5. true

6. false

7. false.

8. true

9. false

10. false

11. false

12. false

13. false

14. true

15. true

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