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 followers information: - PortfolioReturnStd exitBeta X17%40%1.5 Y3%18%-0.25 Z11%15% Riskfree5% If portfolio Z is a faction of 25% in the Riskfree and 75% in the food product 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) talk of two anomalies that the CAPM cant explain. (2 marks) QUESTION 4 Discuss the tailfin factors that postulate the risk premium on an in vestment. (5 marks) QUESTION 5 look at the following information exists in a 2 national agent APT world. PortfolioReturn agent 1 Beta promoter 2 Beta A18.2%1.51.2 B5%1.2-0.8 C12%0.80.99 D6.6%-0.50.

6 Factor 1 insurance premium 4% Factor 2 Premium 6% Riskfree5% figure whether the portfolios are correctly pricedand discuss an arbitrage strategy if in that location 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 taxation greet Ratio = (1 + Pre-tax Return)/(1 + Af! ter-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 plentiful essay, order it on our website: BestEssayCheap.com

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