A client deposits $10,000 into an account earning 5% annually with annual compounding and makes no withdrawals. What is the balance after two years?
A. $11,025
B. $10,500
C. $11,000
D. $12,500
Source: PRIMARY -- Section 2.1(1), pages 7–8: future value and time value of money
Two assets have a correlation coefficient near zero based on a sufficiently long sample. What does that statistic indicate?
A. Their returns tend to move in a fixed inverse proportion
B. No strong linear relationship was observed
C. Both assets have zero volatility
D. Their expected returns are equal
Source: PRIMARY -- Section 2.1(1), pages 7–8: correlation
Five annual returns are negative 3%, 2%, 5%, 8%, and 36%. What is the median return?
Source: PRIMARY -- Section 2.1(1), pages 7–8: mean, median, mode, and range
A portfolio returned 9%, the risk-free rate was 3%, and return standard deviation was 12%. What was its Sharpe ratio?
A. 0.25
B. 0.75
C. 1.33
D. 0.50
Source: PRIMARY -- Section 2.1(1), pages 7–8: Sharpe ratio and standard deviation
A fund produced annual returns of negative 6%, 4%, 8%, and 10%. What was its arithmetic mean annual return?
Source: PRIMARY -- Section 2.1(1), pages 7–8: arithmetic mean
