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Investments
Q1.
What is the least risky asset for each of the following investors?
a. A person investing for her 3 year old
child’s college tuition.
b. A
defined benefit pension fund with benefit obligations that have an average
duration of 10 years. The benefits are not inflation protected.
c. A
defined benefit pension fund with benefit obligations that have an average
duration of 10 years. The benefits are inflation protected.
Q2. How
might the incentive fee of a hedge fund affect the manager’s proclivity to take
on high-risk assets in the portfolio?
Q3.
Conventional wisdom says that one should measure a manager’s investment
performance over an entire market cycle. What arguments support this
convention? What arguments contradict It?
Q4. The
ABC Corporation has a profit margin on sales below the industry average, yet
its ROA is above the industry average. What does this imply about its asset
turnover?
Q5. Why
do bond prices go down when interest rates go up? Don’t lenders like high
interest rates?
Q6.
Search the internet for a recent graph of market volatility. What does this
history suggest about the history of consumption growth?
Q7. If
the APT is to be a useful theory, the number of systematic factors in the
economy must be small. Why?
Q8. If
the offering price of an open-end fund is Rs. 12.30 per share and the fund is
sold with a frontend load of 5%, what is its net asset value?
Assignment Solutions, Case study Answer sheets
Project Report and Thesis contact
ARAVIND – 09901366442 – 09902787224
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