Investment Analysis Exam Paper free essay sample

In the standard deviation and expected return space, the mean-variance combination line is convex while the indifference curve is concave. (c). The variance of portfolio with equal proportions of n assets tends to zero as n ?. (d). For portfolios of many assets, it is not possible to reduce the risk to zero. (e). None of the above. 3. Consider a portfolio of one risky asset and one risk-free asset. Which of the following statements is correct? (a). the correlation between the two assets is not zero. (b). the combination line will be a straight line only if the correlation coef? cient equals -1 or +1. (c). he combination line will be a straight line. (d). the combination line will not be a straight line. (e). none of the above. 4. In the Single Factor Model, you can best measure the contribution that an individual stock makes to the variance of a well diversi? ed portfolio by the stock’s: (a). We will write a custom essay sample on Investment Analysis Exam Paper or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page Variance (b). Correlation coef? cient. (c). Residual variance. (d). Systematic risk. (e). None of the above. 2 E(rP ) A ? X Y ? C ? (rP ) Z B? F IGURE 1. The MVS for assets X, Y and Z, where B is the global minimum variance portfolio. Refer to Figure 1 for questions 5-7 5. Which of the following statements is correct? (a). Without short-selling, you can select portfolio A. (b). All the weights of portfolio C are always positive. (c). All the weights of portfolio A must be positive. (d). It must be the case that some short selling is being permitted. (e). None of the above. 6. Rational investors would prefer (a). Portfolio A. (b). Portfolio B. (c). The portfolios represented along the curve starting at B and passing through A. (d). Portfolio located anywhere on the MVS. 7. With short-selling is allowed, (a). Both A and X are ef? cient (b). Both A and C are inef? cient (c). Both A and X are ef? cient (d). Both C and X are inef? ient 8. Which of the following statements is correct? (a). With short-selling, portfolios made up of the minimum variance portfolios will always be on the MVS. (b). The MVS of many assets is bounded. (c). With short-selling, some of the assets must be located on their MVS. (d). Without short-selling, all assets are always located on their MVS. (e). None of the above. 3 9. The following table lists the expected returns and standard deviation of returns for ? ve assets. Assume an investor must invest all of his/her money in one of the assets. Â µi ? i Asset 1 0. 05 0. 25 Asset 2 0. 10 0. 25 Asset 3 0. 5 0. 30 Asset 4 0. 16 0. 45 Asset 5 0. 17 0. 32 Which of the following statements is true? (a). Asset 3 is inef? cient; (b). Asset 1 is ef? cient; (c). A non-satiated, risk-averse investor could possibly choose Asset 4 depending on the parameters of his/her utility function; (d). A non-satiated, risk-averse investor could possibly choose Asset 2 depending on the parameters of his/her utility function; (e). None of the above 10. Under the standard assumptions of the Single Factor Model ri = ? i +? i rm +oi , how many parameters do you need to estimate in order to construct the MVS of 20 risky assets? Assume the expected return and the variance of the market return rm are given. (a). 420. (b). 200. (c). 61. (d). 60. (e). None of the above. 4 PART II Question 1 The following table gives the expected returns and standard deviations of returns for two securities: Â µi ? i Security 1 0. 10 0. 08 Security 2 0. 20 0. 3 Assume correlation ? 1,2 = ? 0. 5. (1). Calculate the expected return and standard deviation of the global MVP, G. (2). Draw the combination line for these two securities and indicate the portfolio G, the ef? cient portfolios and the inef? cient portfolios. (3). Find the weights and standard deviation of the portfolio with an expected return of 25%. Do you need to sell-short? Question 2 Consider a market containing three risky securities. Suppose the vector of expected returns E(r) and the variance-covariance matrix ? and its inverse variance-covariance matrix 1 are given by ? ? ? ? ? ? 100 0 0 0. 01 0 0 0. 1 0. 04 ? 0. 02? , 1 = ? 0 31. 25 12. 5? . E(r) = ? 0. 15? , ? = ? 0 0 12. 5 25 0 ? 0. 02 0. 05 0. 2 (1). Formulate the Markowitz problem for a portfolio of the three risky securities with a target return of 16% and obtain the ? rst order conditions. Note: you are not required to solve the problem. (2). Compute the values of the scalars A, B, C and ?. (3). Find the expected return and standard deviation of the MVP. Find the standard deviations of the two minimum variance portfolios P1 and P2 with E(rP1 ) = 10% and E(rP2 ) = 25%. (4). Draw a rough sketch of the MVS and the asymptotes in the mean-standard deviation space. Your diagram should indicate the positions of P1 , P2 and the MVP. Without short-selling, is it possible to construct an optimal portfolio with an expected return of 25%? Explain why? 5 Question 3 Note: You may use your answers from Question 2 to answer this question. Consider portfolios containing the three risky securities in the previous question (Question 2) together with a risk-free security paying rF = 0. 05. (1) Verify that 1 = I. (2) Find the standard deviations of the two minimum variance portfolios P3 and P4 with E(rP3 ) = 10% and E(rP4 ) = 25%. Find the mean and standard deviation of the tangency portfolio T . (3) Draw a rough sketch to indicate the tangency relation between the MVS with and without the risk-free asset and locate P3 and P4 on the MVS. Are they ef? cient or inef? cient? (4) For the minimum variance portfolios with the expected returns of 10% and 25%, do you bene? from investing in both the risky assets and the risk-free asset in compare with investing in the risky assets only? If so, what are the bene? ts? Question 4 Suppose a single-factor model (SFM) has been ? t to the returns of Stocks A and B as follows: rA = 0. 02 + rM + oA rB = 0. 01 + 0. 8rM + oB . Suppose further that the expected return and standard deviation of the market return is 2 Â µM = 0. 1, ? M = 0. 20, and that the R-square statistics for the two stocks are RA = 0. 8 2 and RB = 0. 9, respectively. Now answer the following questions: (a) What are the total risks and unsystematic risks for the two stocks? b) What is the correlation between the returns of the two stocks?

30 Famous Food Quotes to Satiate Your Soul

30 Famous Food Quotes to Satiate Your Soul The fetish for food is like a secret affair you never want to reveal. You cant help salivating when you see the oh-so-delicious birthday cake, or the crisp fries, or even the melt-in-your-mouth lamb shanks. You may want to pretend that food does not affect you that much. But come on! Lets be honest here. Dont you wish you could eat all those yummy, to-die-for candies without putting an ounce of weight? What thought crosses your mind when you see a delicious slice of cheese? Most of us would think of how it would melt in our mouth. But only a true connoisseur of fine food, like Clifton Fadiman, could think of another viewpoint, Cheese- milks leap toward immortality. Clearly, food is an obsession with many. Binge on these other famous quotes about food.   Mark Twain: Sacred cows make the best hamburger.Alphonse Allais: Coffee is a beverage that puts one to sleep when not drank.Samuel Johnson: He who does not mind his belly will hardly will hardly mind anything else.Elizabeth Berry: Shipping is a terrible thing to do to vegetables. They probably get jet-lagged, just like people.President George Bush: I do not like broccoli. And I havent liked it since I was a little kid and my mother made me eat it. And Im President of the United States and Im not going to eat any more broccoli.George Bernard Shaw: There is no sincerer love than the love of food.Confucius: The way you cut your meat reflects the way you live.Spanish Proverb: The belly rules the mind.Socrates: Worthless people live only to eat and drink; people of worth eat and drink only to live.James Beard: A gourmet who thinks of calories is like a tart who looks at her watch.Mahatma Gandhi: To a man with an empty stomach, food is god.Arthur Pendenys: A good meal makes a man feel more charitable toward the whole world than any sermon. Harry Hopkins: Hunger is not debatable.Polish Proverb: Even were a cook to cook a fly, he would keep the breast for himself.Christopher Morley: No man is lonely while eating spaghetti- it requires so much attention.Philip W. Haberman: A gourmet is just a glutton with brains.Sir Robert Hutchinson: Vegetarianism is harmless enough, though it is apt to fill a man with wind and self-righteousness.H. S. Leigh: If you wish to grow thinner, diminish your dinner.Adelle Davis: Eat breakfast like a king, lunch like a prince, and dinner like a pauper.Alice May Brock: Tomatoes and oregano make it Italian; wine and tarragon make it French. Sour cream makes it Russian; lemon and cinnamon make it Greek. Soy sauce makes it Chinese; garlic makes it good.Anthelme Brillat-Savarin: Tell me what you eat, and I will tell you what you are.Eike von Repkow: He who comes first, eats first.Epictetus: Preach not to others what they should eat, but eat as becomes you, and be silent.Fran Lebowitz: Food is an impo rtant part of a balanced diet. Elsa Schiaparelli: A good cook is like a sorceress who dispenses happiness.French Proverb: A good meal ought to begin with hunger.Plutarch: It is a hard matter, my fellow citizens, to argue with the belly, since it has no ears.Latvian Proverb: A smiling face is half the meal.Polish Proverb: Fish, to taste right, must swim three times- in water, in butter, and in wine.

Market Cultural Report ( International Business ) Essay

Market Cultural Report ( International Business ) - Essay Example This is because people in different countries have different cultures depending on their understanding of things and their traditions. This is also so as to avoid cultural conflicts in the host country that may affect the acceptance of the business by the citizens. This report analyses the culture of the United Arab Emirates (UAE), in specific the Emirates of Dubai. It looks at some of the cultural components of the country and how this impacts the international business. These cultural components include, the traditions of the country, the beliefs and the religious aspects affecting the market. Finally, it looks at what businesses need to do or consider in order for it to operate effectively in this country and gives a conclusion of the important factors from the report based on the chosen market and the cultural factors in the market. The reason for choosing the Emirates of Dubai is because it is the second largest city in the United Arab Emirates (UAE). It has a growing reputation as being one of the most attractive places in the world. It is modern with infrastructure and has become a major force of the economy globally, it has world class business environment that attracts many investors. It is also a politically stable country able to attract many foreign investors. The fact that it has a free economy means that there is minimal government control and minimal regulation in the private sector making the country to become a very attractive place to invest. It is one of the most liberal countries in the gulf that results to an attraction of a high capital to flow across the region (Noack, 2009). This makes it worth to look at the country when considering international business. The country also is rich in its culture. The Emirates of Dubai culture is mainly shaped by the traditions of the Arabs that are based on the Islam background. The religion shapes all aspect of the daily life of people in the country. It is