Final Exam - Due Week 5 Day 7 100 Complete the following...

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Due Week 5 - Day 7 100 Complete the following exam and post it to the Assignment section. FINAL EXAM 1) A portfolio with a correlation of +1 is not a well-diversified portfolio. What must you as an investor do to structure a portfolio with negative correlation? Me as an investor would structure the portfolio so that the securities chosen move in the opposite direction to create the negative correlation. 2) What macroeconomic variable do you believe has the greatest impact on interest rates? Inflation? Briefly explain. The macroeconomic variable that has the most impact on interest rates is GDP. GDP shows us how much consumption there is. GDP gives specifics on the amount of goods, services, and durable goods sold. GDP is a leading economic indicator that is based on the facts of the near past. Economists can better predict how and what to do to jump start (or slow does) the economy. 3) Compare and contrast the Capital Asset Pricing Model (CAPM) and Arbitrage Pricing Theory (APT)? Which model is appropriate for calculating a stock's required rate of
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Final Exam - Due Week 5 Day 7 100 Complete the following...

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