ECO 316 Week 1 Chapter 5 The Theory of Portfolio Allocation

Topics: Mutual fund, Investment, Bond Pages: 2 (371 words) Published: November 4, 2014

This pack of ECO 316 Week 1 Chapter 5 The Theory of Portfolio Allocation comprises:

5.1 Multiple Choice Questions

1) A portfolio is a

2) The theory of portfolio allocation describes

3) An asset in a portfolio always represents

4) Which of the following assets made up the largest fraction of the portfolios of U.S. households in 2006?

5) Which of the following assets made up the largest fraction of the portfolios of U.S. households in 1950?

6) Which of the following was NOT a major store of U.S. household wealth in 1950?

7) Comparing U.S. household portfolios in 2006 with U.S. household portfolios in 1950, which of the following statements is true?

8) The theory of portfolio allocation

9) Which of the following is NOT a determinant of asset demand?

10) Economists believe that as a saver's wealth increases, the saver will generally

11) As wealth increases, which of the following is likely to account for a smaller fraction of a saver's portfolio?

12) As wealth decreases, which of the following is likely to account for a larger fraction of a saver's portfolio?

13) The wealth elasticity of demand describes the percentage change in

14) Suppose that when your wealth increases from $100,000 to $200,000, your holdings of savings deposits increase from $10,000 to $12,000. Your wealth elasticity of demand for savings deposits then is

15) Suppose that when your wealth increases from $100,000 to $200,000, your holdings of stock mutual funds increases from $20,000 to $50,000. Your wealth elasticity of demand for stock mutual funds then is

16) Suppose that when your wealth increases from $100,000 to $200,000 , your holdings of U.S. Treasury securities increases from $2000 to $5000. Your wealth elasticity of demand for U.S. government securities then is

17) Necessity assets are assets

18) Necessity ...

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