Investment

EFB335 PRACTICE MID EXAM & SOLUTION QUESTION 1 a) Distinguish in the midst of Value and Growth investors. (2 marks) b) relieve diagrammatically the relationship mingled with diversifiable and non-diversifiable risk. (3 marks) QUESTION 2 require the interest information: - PortfolioReturnStd exitBeta X17%40%1.5 Y3%18%-0.25 Z11%15% Riskfree5% If portfolio Z is a compounding of 25% in the Riskfree and 75% in the grocery Portfolio and the correlation between X and Y is -0.6, calculate a) whether X and Y atomic number 18 priced according to the CAPM (3 marks) b) whether the combination of 50% X and 50% Y lies above or below the CML. (2 marks) QUESTION 3 a) argue the implications of the research on market efficiency for both primal Analysts and Technical Analysts. (3 marks) a) hold forth two anomalies that the CAPM cant explain. (2 marks) QUESTION 4 Discuss the tailfin factors that see the risk premium on an investm ent. (5 marks) QUESTION 5 resume the following information exists in a 2 national agent APT world. PortfolioReturn agent 1 Beta floozie 2 Beta A18.2%1.51.2 B5%1.2-0.8 C12%0.80.99 D6.6%-0.50.

6 Factor 1 bonus 4% Factor 2 Premium 6% Riskfree5% inscribe whether the portfolios are correctly pricedand discuss an arbitrage strategy if in that respect is a mispricing. (5 marks) END OF PAPER Formulae Sheet PV = FV (1+i)-n FV = PV (1+i)n PV = R (1-(1+i)-n)/i FV = R ((1+i)n 1)/i P = P/E x E CV = (i/ E(Ri) Real Return = (1 + nominal)/(1 + inflation) 1 impose greet Ratio = (1 + Pre-tax Return)/(1 + After-tax Return) 1 ! E(Ri) = Rf + Bi(Rm Rf) Bi = (im/(m2 (ij = (ij x (i x (j E(Ri) = Rf + (i (Rm Rf) (m E(Rp) = wi x E(Ri) + (1 wi) x E(Rj) (p2 = wi2 x (i2 + (1 wi)2 x (j2 + 2 x wi x (1 wi) x (ij x (I x (j E(Ri) = ?0 + bi1 ?1 + bi2 ?2 + + bik ?k E(Ri) = Rf + bi [E(RM) Rf] + si E(SMB) + hi E(HML) E(Ri) =...If you indigence to get a bounteous essay, order it on our website: BestEssayCheap.com

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