School of Economics and Finance
La Trobe University
Investment and Portfolio Management (FIN3IPM)
Semester 2, 2013
MIDSEMESTER TRIAL TEST PAPER
The material provided includes:
The mid-semester test mu
IZiitinrreiot 'E’ Flag guesticng
MarchutofE
Which of the following statements is true?
Select one:
' a. If a market is weak-form efﬁcient, it is impossible to consistently earn an abnormal return us
Question mrrect Ir Hag question
3 Mark 2 out of 2
A portfolio is considered to be efﬁcient it:
Select one:
'_ a. No other portfolio offers higher expected returns with the same risk
' b. No other port
Ebrract 1? Flag question
Question
2 Mark2outof2
The _ the variance of returns, everything else remaining constant. the _ the dispersion of expectations and the _
the risk
Select one:
CD a. Larger, g
Dorrect 1? Flagquestion
1 MarkZ suture
Between 1986 and 1996, the standard deviation of the returns for the NYSE and the EULA. indexes were GL1 ﬂ and {1.09,
respectively, and the oovarianoe of these i
Don'sct
Question
9 Mark 2.00 out of EDD
The most appropriate discount rate to use when applying tine Operating Free Cash Flow model is the firm‘s
Select one:
" a. required rate of return based on th
ECO2MEC
Managerial Economics
Tutorial 6 Week 8
Product differentiation
Prepare your answers before coming to the tutorial.
Consider a small town in the middle of nowhere. There is only one street in t
ECO2MEC
Managerial Economics
Tutorial 1 Week 3
Basic economic concepts
Prepare your answers before coming to the tutorial.
1. The cost function of a firm is given by c(q) = (2/3)q3 8q2 + 48q + 20 wher
ECO2MEC
Managerial Economics
Tutorial 4 Week 6
Basic game theory
Prepare your answers before coming to the tutorial.
1. A and B are playing a simultaneous-move game. A can choose either High or Low an
I I ‘ In "'"
MarkZoutofE
The most important cn'terie when adding new investments to a portfolio is the—
Select one:
' a. Expected return of the new investment
' b. Standard deviation of the new invest
Question mm
‘3' Flag question
1 D MarkZ crLItofi
A portfolio is composed of two shares. A and B. Share A has a standard deviation of return of 24% while share B has a
standard deviation of return of 1
Don'sct 17 Flag question
6 Mark 2 out of 2
In a two stock portfolio, if the correlation coefﬁcient between two stocks were to decrease over time. everything else
remaining constantr the portiolio‘s ri
Mark2outof2
For a two stock portfolio containing Stocks i and jr the correlation coefficient of returns (raj) is equal to the square root of
the covariance {COW}-
Select one:
' Two
(3' False «I
Your a
Question II'lCDITECt ? W.
1 Mark I] out of 5'.
Suppose you pay QED for a $1 £1,000 per Treasury Bond maturing in 2 months. What is the effective annu ai percentage
rate of return for 1this investment?
Question Dermot 1? Flag question?
1 2 Markimtofz
Factor E(Rm}-Rf 5MB HML
Sensitivity bi = den si = {1.44 hi = [1.23
Risk premium 15% £95 4%
An asset hes the above sensitivities to the market portfolio
1ir‘v'hich of the foiiowing statements is correct?
Select one:
G) 3. Both the CAPM and the APT state that there is a linear relation between risk and expected return. «f ‘r'our answer
is correctI
' c.
Mark2 autofi
The unsystematic risk which can be eliminated and the market risk is the
Select one:
" a. aggregate risk
(9 h. remaining risksf' Your answer is correct!
" c. effective risk
_" d. ineffect
II I -.- -
2 Mark2crutof2
The expected return for a stock, calculated using the CAPMi is 1 0.5%; The ma rket return is 915% and the beta of the stock
is ‘I .50. Calculate the implied risk—free rate.
Garrett F Flag queetiei
Question
5 Mark2cutnf2
The expected return fcra stack. calculated using the CAPM. is 25%. The risk free rate is 15% and the beta of the stock is
ELSE. Eaicuiate the impiied m
LIES-tin” LAJIIULTI. T ring IILIISHLILII
8 Mark 2 out of 2
According to the APE the value of the ﬁrm-speciﬁc factor is expected to be, on average
Select one:
IE) 3. zero. «f er answer is correct!
" -
Correct '1’ Flag question
in regression of capital asset pricing modei, the intercept of excess returns is classiﬁed as
Select one:
' a. Tenors reward to volatiiity ratio
(E) b. Jensen's sipha J Your
correct 'F Flag question-
Question
4 Markimtofﬂ
Arbitrage opportunity means you can earn a positive return with
Select one:
{El 3. zero initial investment and zero risk. q!“ Your answer is correct!
ECO2MEC
Managerial Economics
Tutorial 2 Week 4
Monopoly and perfect competition
Prepare your answers before coming to the tutorial.
1. A monopolist firm faces the demand for its product qD = 180 4p wh
ECO2MEC
Managerial Economics
Tutorial 5 Week 7
Duopoly
Prepare your answers before coming to the tutorial.
Prepare your answers for Q2 on a separate sheet of paper for submission at
the tutorial.
Your
SOLUTION TUTORIAL 8
Chapter 12
Macroeconomic and Industry Analysis
PROBLEM SETS
Question 1
A top-down approach to security valuation begins with an analysis of the global and domestic
economy. Analyst
TUTORIAL 5 - QUESTIONS
Chapter 8
The efficient market hypothesis
Question 1
If markets are efficient, what should the correlation coefficient be between stock returns for
two non-overlapping time peri