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NEW QUESTION: 1
Charles A. Lindbergh is remembered as the first person to make a nonstop solo flight across the Atlantic,
in 1927. This feat, when Lindbergh was only twenty-five years old, assured him a lifetime of fame and
public attention. Charles Augustus Lindbergh was more interested in flying airplanes than he was in
studying. He dropped out of the University of Wisconsin after two years to earn a living performing
daredevil airplane stunts at country fairs. Two years later, he joined the United States Army so that he
could go to the Army Air Service flight-training school. After completing his training, he was hired to fly
mail between St. Louis and Chicago. Then came the historic flight across the Atlantic. In 1919, a New
York City hotel owner offered a prize of $25,000 to the first pilot to fly nonstop from New York to Paris.
Nine St. Louis business leaders helped pay for the plane Lindbergh designed especially for the flight.
Lindbergh tested the plane by flying it from San Diego to New York, with an overnight stop in St. Louis.
The flight took only 20 hours and 21 minutes, a transcontinental record. Nine days later, on May 20,1927,
Lindbergh took off from Long Island, New York, at 7:52 A. M. He landed at Paris on May 21 at 10:21 P. M.
He had flown more than 3,600 miles in less than thirty four hours. His flight made news around the world.
He was given awards and parades everywhere he went. He was presented with the U. S. Congressional
Medal of Honor and the first Distinguished Flying Cross. For a long time, Lindbergh toured the world as a
U. S. goodwill ambassador. He met his future wife, Anne Morrow, in Mexico, where her father was the
United States ambassador. During the 1930s, Charles and Anne Lindbergh worked for various airline
companies, charting new commercial air routes. In 1931, for a major airline, they charted a new route from
the east coast of the United States to the Orient. The shortest, most efficient route was a great curve
across Canada, over Alaska, and down to China and Japan. Most pilots familiar with the Arctic did not
believe that such a route was possible. The Lindberghs took on the task of proving that it was. They
arranged for fuel and supplies to be set out along the route. On July 29, they took off from Long Island in a
specially equipped small seaplane. They flew by day and each night landed on a lake or a river and
camped. Near Nome, Alaska, they had their first serious emergency. Out of daylight and nearly out of fuel,
they were forced down in a small ocean inlet. In the next morning's light, they discovered they had landed
on barely three feet of water. On September 19, after two more emergency landings and numerous close
calls, they landed in China with the maps for a safe airline passenger route. Even while actively engaged
as a pioneering flier, Lindbergh was also working as an engineer.
In 1935, he and Dr. Alexis Carrel were given a patent for an artificial heart. During
World War I in the 1940s, Lindbergh served as a civilian technical advisor in aviation.
Although he was a civilian, he flew over fifty combat missions in the Pacific. In the
1 950s, Lindbergh helped design the famous 747 jet airliner. In the late 1960s, he spoke widely on
conservation issues. He died August 1974, having lived through aviation history from the time of the first
powered flight to the first steps on the moon and having influenced a big part of that history himself.
What happened immediately after Lindbergh crossed the Atlantic?
A. He flew the mail between St. Louis and Chicago.
B. He was given the Congressional Medal of Honor.
C. He attended the Army flight-training school.
D. He left college.
E. He married Anne Morrow.
Answer: B
NEW QUESTION: 2
Factor Analytics Capital Management makes portfolio recommendations using various factor models.
Mauricio Rodriguez, a Factor Analytics research analyst, is examining the prospects of two portfolios, the FACM Century Fund (CF) and the FACM Esquire Fund (EF).
The variance of returns are identical for the two funds. The estimates in Exhibit 1 were derived for CF and EF using monthly data for the past five years.
Supervisor Barbara Woodson asks Rodriguez to use the Capita! Asset Pricing Model (CAPM) and a multifactor model (APT) to make a decision to continue or discontinue the EF fund. The two factors in the multifactor model are not identified. To help with the decision, Woodson provides Rodriguez with the capital market forecasts in Exhibit 2.
After examining the prospects for the EF portfolio, Rodriguez derives the forecasts in Exhibit 3.
Rodriguez also develops a 2-factor macroeconomic factor model for the EF portfolio. The two factors used in the model are the surprise in GDP growth and the surprise in Investor Sentiment. The equation for the macro factor model is:
During an investment committee meeting, Woodson makes the following statements related to the 2-factor macroeconomic factor model.
Statement 1: An investment combination in CF and EF that provides a GDP growth factor beta equal to one and an Investor Sentiment factor beta equal to zero will have lower active factor risk than a tracking portfolio consisting of CF and EF.
Statement 2: When markets are in equilibrium, no combination of CF and EF will produce an arbitrage opportunity In their final meeting, Rodriguez informs Woodson that the CF portfolio consistently outperformed its benchmark over the past five years. Rodriguez makes the following comments to Woodson: "The consistency with which CF outperformed its benchmark is amazing. The difference between the CF monthly return and its benchmark return was nearly always positive and varied little over time." The historical performance of the CF portfolio is best summarized as:
A. high tracking risk.
B. high information ratio.
C. high active risk.
Answer: B
Explanation:
Explanation/Reference:
Explanation:
The information ratio equals active return divided by active risk. Active return equals the average difference between the CF portfolio return and the benchmark return. Active risk equals the standard deviation of the CF minus benchmark returns. From the comments made by Rodriquez about the historical performance of the CF portfolio, we know that the numerator of the information ratio is positive and the denominator is very close to zero. Therefore, the information ratio will be high.
The fund standard deviation was very close to its benchmark (since its returns were nearly always a constant percentage above the benchmark). The CF fund rose and fell with the benchmark (same risk as the benchmark) but always beat the benchmark (outperformed the benchmark). Therefore, tracking risk (which is also referred to as active risk) is low. (Study Session 18, LOS 64.m)
NEW QUESTION: 3
In addition to compression savings, what information is shown in a Comprestimator output?
A. Thin provisioning savings
B. Encryption savings
C. Pattern removal savings
D. Data deduplication savings
Answer: A
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