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Question 1
Under the Capital Asset Pricing Model (CAPM), what is the expected return of an asset with systematic risk beta β_i = 1.40, assuming the risk-free rate is 3.5% and the expected return on the market portfolio is 8.5%?
Correct Answer:
10.50%
Question 2
In Modern Portfolio Theory (Markowitz), what does the 'Two-Fund Separation Theorem' establish?
Correct Answer:
Any optimal portfolio on the efficient frontier can be formed by combining the risk-free asset and the unique tangency (market) portfolio of risky assets in appropriate proportions
Question 3
In fixed income asset-liability management, what is the Macaulay duration of a 3-year annual bond with face value AUD 1,000 paying a 6% annual coupon, yielding 6% per annum (trading at par)?
Correct Answer:
2.833 years
Question 4
A bond portfolio has a Modified duration of 7.50 years and Convexity of 80.0. If market yields increase by 100 basis points (+1.00%), what is the estimated percentage change in portfolio value using the second-order duration-convexity approximation?
Correct Answer:
-7.10%
Question 5
Under APRA Prudential Standard SPS 530 (Investment Governance for Superannuation Trustees), what is the trustee's mandatory obligation regarding 'Liquidity Management'?
Correct Answer:
The trustee must maintain a robust Liquidity Management Plan (LMP), establish clear liquidity stress testing scenarios, set minimum liquid asset buffers, and ensure member rollovers and benefit payments can be met without fire-selling unlisted assets
Question 1
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Prepare with the Investment (INV) Practice Questions - Investment (INV) - Actuaries Institute Fellowship Program Exam practice quiz. This question bank includes 100 questions covering asset, portfolio, institutional, duration, and fund. Use it to review important concepts, identify knowledge gaps, and build confidence for the related exam, course, or assessment.

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Investment (INV) Practice Questions - Investment (INV) - Actuaries Institute Fellowship Program Exam

This practice set contains 100 questions from the matching question bank and focuses on asset, portfolio, institutional, duration, and fund. Work through each question carefully, review the provided solutions, and revisit topics that need more study before your next attempt.

This is an independent study resource intended for practice and review; it is not an official examination or an endorsement by any organization named in the title.

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