Q4: What is the main disadvantage of Index Fund?
Q: What is CML? a. The CAL defined by the market portfolio. b. All of them. C. The steepest capital…
A: The Capital Asset Pricing Model (CAPM) is a mathematical model that depicts the relationship between…
Q: Which of the following would be the most appropriate benchmark to use for hedge fund evaluation?a. A…
A: Hedge funds aim to maximize the investors returns and eliminate the risks.
Q: A. Liquidity risk B. Political risk C. Currency risk D. Competition risk
A: International fund involve investment at international levels.
Q: In the PSE trading flow, in what step do the investors prepare the fund? a.step 5 b.step 3…
A: Philippine Stock Exchange Index is defined as an important or main stock market index, which helps…
Q: 5. What is a multi-factor model technique and why is it used in fixed-income portfolio management?
A: Fixed income portfolio comprises of the securities that generate regular income to the investors at…
Q: Of the following investment vehicles, which is the best and which is the worst? Choose from common…
A: There are various investment vehicles such as common stocks, mutual funds, ETFs and REITs. Common…
Q: Which of the following investment types cannot be sold during normal market hours? a) mutual fund…
A: Investment is a process of investing money with the motive of making more money. The person who…
Q: Which of the following hedge fund types is most likely to have a return that is closest to…
A: The question is based on the fundamental behind Hedge fund investment, the hedge fund managers use…
Q: The measure of risk is called: Group of answer choices Beta The market rate of return The…
A: Risks are of 2 types: Systematic risk Unsystematic risk Systematic risk includes: Market risk…
Q: Why is it so hard for actively managed funds to generate higher rates of return than passively…
A: Introduction: Mutual funds are institutions interested in pooling small sums from different…
Q: ) What does the single index model estimate? B) What is the market risk premium? C) What does Beta…
A: A single index model simplifies security analysis by estimating the expected return on security…
Q: Consider a stock fund and a bond fund with the following characteristics and a correlation of 0.2. A…
A: Here. Expected return of Stock Fund is 20% Expected return of Bond Fund is 12% Standard Deviation of…
Q: What is the Sharpe ratio of the best feasible CAL?
A: CAL is the Capital Allocation Line, also known as Capital Market Line. It is a straight line and…
Q: Consider the following hypothetical firms with their respective beta ABC- 1 MNO- 0 QRS- 1.2 XYZ-…
A: beta : It is the measure of systematic risk of security or portfolio compared to market risk.
Q: Consider the following financial market with two risky assets x and y as well as a risk-free asset…
A: Any location or system that gives buyers and sellers the ability to exchange financial assets, such…
Q: onsider the following information (Assume that Security M and Security N are in the same financial…
A: Expected return is calculated by using CAPM equation. CAPM measures systematic risk Expected return…
Q: Consider the following information: Standard Deviation. Beta Security T…
A: Financial security is the financial asset that is traded in the financial markets and refers to…
Q: Give the difference between hedge funds and money market funds.
A: Hedge funds are option investments that use combined funds to generate effective gains for their…
Q: It measures how much rate of return the fund manager/fund generates per unit of systematic risk…
A: Financial investments are the methods through which investors park or save their funds and money in…
Q: 2. What are the two types of fixed-income portfolio management strategies and why is each used?
A: The portfolio composed of securities resulting in the regular cash flows which will ultimately helps…
Q: Assume the risk-free rate is 4%. You are a financial advisor, and must choose one of the funds below…
A: Given information: Risk free rate is 4% Determining the best choice of fund for client: Excel…
Q: weigh up the advantages and disadvantages of Exchanges Traded Funds (ETF) and explain why they are…
A: There are many types of funds available in the market and each fund has own advantages and…
Q: Consider the following information (Assume that Security M and Security N are in the same financial…
A: Systematic risk is also known as non-diversifiable risk, and it exist for entire market. It arises…
Q: If reserve requirements were eliminated in the future, as some economists advocate, what effects…
A: Solution- Two sets of rules that have seriously restricted the power of banks to create profits are…
Q: 4. What are the various types of risk intrinsic to fixed-income portfolios?
A: Fixed income portfolios include investments that provide periodic interest at a fixed rate. Fixed…
Q: Explain what type of firms a Buyout Fund (or a Private Equity Fund) might target as part of a…
A: A leveraged buyout (LBO) is a type of business acquisition in which the vast majority of the cost of…
Q: Which of these are true about the Security Market Line and Capital Market Line models? 1. the…
A: The question is to explain capital market line and security market line .Capital market line…
Q: please choose an Exchange Traded Fund (ETF) and discuss the characteristics of this ETF. Pick any…
A: The chosen ETF is SPDR S&P 500 ETF Trust SPDR stands for Standard & Poor Depositary Receipts…
Q: Given a simple world with two assets, a bond fund and a stock fund, clearly detail the steps…
A: The theory of Efficient Frontier is concerned with considering a cluster of investments and then…
Q: our Transactions demand is 70% Your Precautionary Demand is 20% Your Speculative Demand is 10% Your…
A: Investment Opportunities classified on the basis of their return and demand: Transaction Demand…
Q: What are the advantages of evaluating fund performance based on Internal Rate of Return (IRR)? Why…
A: The internal rate of return is the expected annual growth rate from an investment. Whenever the IRR…
Q: )As an equity analyst, you have developed the following return forecasts Problem 3 0 and risk…
A: Financial statements are statements which states the business activities performed by the company .…
Q: Explain in detail how to derive the fund separation result from week 2. Explain what happens to the…
A: Efficient portfolio An efficient portfolio is one that offers the highest expected rate of return…
Q: The market risk premium is defined as __________. A. the difference between the return on an index…
A: Market Risk Premium refers to the additional or extra amount of return which an investor earned by…
Q: You develop the following covariance matrix of returns Hedge Fund Market Index Hedge Fund 64 42…
A: The covariance matrix is a matrix which, at the intersection of each of its rows and columns,…
Q: What are the two ways a sinking fund can be handled? Whichmethod will be chosen by the firm if…
A: A sinking fund is a fund created periodically by setting aside money for the gradual repayment of a…
Q: What does the total risk consist of? What kind of risk is eliminated with portfolio diversification
A: Without a proper understanding of risk, investment planning is almost impossible. Risk occurs due to…
Q: LO1 Show the reasons why the net present value criterion is the best way to evaluate proposed…
A: Since you have posted a question with multiple questions, we will solve the first one for you. If…
Q: Please answer the following questions. Thank you. Refer to to the picture below for information.…
A: The NAVPU of the above ATC funds are lower than that of BPI AMTC. No, the NAV per unit is not…
Q4: What is the main disadvantage of Index Fund?
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- Which of the following would be the most appropriate benchmark to use for hedge fund evaluation?a. A multifactor model.b. The S&P 500.c. The risk-free rate.Q4. Describe the typical organization of a buyout fund.What are the two ways a sinking fund can be handled? Whichmethod will be chosen by the firm if interest rates have risen? Ifinterest rates have fallen?
- Which of the following is a risk particular to international funds? Select one: A. Liquidity risk B. Political risk C. Currency risk D. Competition riskWhich one of the following funds should be viewed as less attractive when held in a large, well-diversified portfolio? Fund E[R] Standard Deviation Beta ABC 10% 35% 1.2 XYZ 10% 30% 1.6 Group of answer choices ABC because its beta is lower. XYZ because its beta is higher. ABC because its standard deviation is higher. XYZ because its standard deviation is lower.H2. please choose an Exchange Traded Fund (ETF) and discuss the characteristics of this ETF. Pick any ETF of your choice. Please include: Description Ticker Market value Share Price Strategy
- It measures how much rate of return the fund manager/fund generates per unit of systematic risk (beta)? a.PSE b.Jensen Index c.Treynor Index d. Sharpe IndexQ1. A mutual fund advertises a money market fund whose current rate is 0.06, and is deemed safe (riskless asset). In addition, the mutual fund also offers an equity fund that is considered very aggressive in terms of growth. Historical expected returns are 0.30 with a standard deviation of 0.25. a) Derive the risk-reward trade-off line. b) For each unit of extra risk that an investor bears, how much extra expected return will result? c) What allocation should be placed in the money market fund if an investor desires an expected return of 18%? Please solve these questions use the formula in the attached image. If possible please explain your answer in detail. Thank you in advanced!Please answer the following questions. Thank you. Refer to to the picture below for information. 1. The NAVPU of the above ATC funds are lower than that of BPI AMTC. Do you think it should affect your investment decision? 2. The equity fund of BPI AMTC (-11.96%) is underperforming YTD versus that of ATRAM (-8%). Does that mean it will continue to underperform in the future?
- Explain the following with one suitable example/scenario. 1) SINKING FUND 2) INDEXATION 3) ESCALATIONwhat is the difference between a growth fund and balanced fund?Consider the following information (Assume that Security M and Security N are in the same financial market): Standard Deviation BetaSecurity M 20% 1.25Security N 30% 0.80 Which security has more total risk? Group of answer choices Security M Security N Equal