Bachelor of Business
(Incorporating Graduate Diploma in Business & Graduate Certificate in Business)
INVESTMENT AND PORTFOLIO ANALYSIS
396003
Solutions
FINAL EXAMINATION
SEMESTER 1 2013
SECTION 1:
MUTIPLE CHOICE
(TOTAL: 12 MARKS)
Each question is worth 1
Bachelor of Business
(Incorporating Graduate Diploma in Business & Graduate Certificate in Business)
INVESTMENT AND PORTFOLIO ANALYSIS
396003
FINAL EXAMINATION
SEMESTER ONE, 2013
Date:
Time Allowed:
Friday, 14 June 2013
3 hours plus 10 minutes reading for
Lecture 6
The Efficient Market Hypothesis
Code of Ethics and Standards of
Professional Conduct
1
Random Walks and the Efficient Market
Hypothesis (EMH)
Efficient market hypothesis states that security
prices fully reflect all available information.
Random
Lecture 11
Portfolio Performance Evaluation
CFA Standard VI
1
Performance evaluation
Purpose:
Are the returns worth the risk and the fees?
Measures
Average return by itself is an insufficient
measure. Why?
Average return may not = expected return
Risk
Lecture 7
Equity Valuation
1
Alternative measures of firm value
Book value: the net worth of common
equity
Market value:Current market value of
assets minus current market value of
liabilities
Liquidation value: net amount that can
be realized by selling
Lecture 8
Bond Prices and Yields
1
Bond Characteristics
Bond
A security that obligates the issuer to make specified
payments to the holder over a period of time.
Coupon payments
A typical coupon bond obliges the issuer to make
semi-annual coupon payments
Lecture 2
Risk and Return
1
Rates of Return
The total holding-period return (HPR) measures by how much the
value of initial investment has grown over the investment period:
Dollar Return
Beginning Price
Ending Price (P1 ) - Beginning Price (P0 ) Dividend
Lecture 9
Term Structure of
Interest Rates
1
Overview of Term Structure
The yield curve is a graph that
displays the relationship between
yield and maturity.
Information on expected future
short term rates can be implied
from the yield curve.
2
Figure 15.
Lecture 10
Managing Bond Portfolios
1
Interest Rate Sensitivity: Change in
Bond Price as a Function of YTM
P
P
YTM
2
Interest Rate Sensitivity
1.
2.
3.
4.
5.
6.
Inverse relationship between price and yield
An increase in a bonds yield to maturity results
CHAPTER 6: CAPITAL ALLOCATION TO RISKY ASSETS
PROBLEM SETS
1.
(e) The first two answer choices are incorrect because a highly risk averse
investor would avoid portfolios with higher risk premiums and higher standard
deviations. In addition, higher or lowe
CHAPTER3:HOWSECURITIESARETRADED
Conceptchecks3,4,5,and6.
Thesolutionstothe4conceptchecksareonPage91ofthetextbook.
PROBLEM SETS
1.
Stop-loss order: allows a stock to be sold if the price falls below a predetermined
level. Stop-loss orders often accompany s
FINA 602
Group Assignment 1:
Stream 5, Group #3
Question 1: Risk & Return
State of
economy
Probability of
state occurring
Return p.a. (money
market fund)
Return p.a. (fixed
income fund)
Return p.a. (equity
fund)
Recession
0.1
0.04
-0.05
-0.1
Normal
0.5
0.
Lecture 4
Capital Asset Pricing Model
1
Capital Asset Pricing Model (CAPM)
Equilibrium model that underlies modern
financial theory
Derived using principles of diversification with
simplified assumptions
2
CAPM - Assumptions
Individual investors
are price
Lecture 3
Optimal Risky Portfolios
1
Diversification and Portfolio Risk
Why diversify by investing in many different
securities?
Answer: Reduce the risk of investment!
Two types of risks for investment in securities:
Market risk
Systematic or Non-divers
Lecture 5
Arbitrage Pricing
Theory
Multifactor Models of
Risk and Return
1
Arbitrage Pricing Theory (APT)
Arbitrage:
Zero investment:
Arises if an investor can construct a zero
investment portfolio with a sure profit
Since no net investment outlay is requ
Accounting for
Intangibles
Learning objectives
At the end of the session, you are expected to
understand:
the salient features of IAS 38.
the logic of the IASB for not recognising internallygenerated intangibles.
the arguments for recognising internall
MARS501 Week 9
Communicating
1
What do we mean by
communications?
2
Brainstorm:
What are some of the best brand
communications youve come across?
What makes them good?
3
Communication
Objectives
Firm Objectives
Inform, persuade,
remind & reassure.
Bra
Week 6
Positioning in an Omni
Environment
MARS501
MARS in an Omni
Environment
1
Role of the Environment
across Channels
ENVIRONMENTAL EFFECTS
Producer /
Retailer
Supply Channels
Distribution Channels
Upstream
Downstream
2
External Factors
3
PESTEL Analysi
Brands: How do we
create brands?
MARS 501
Semester 2, 2016
Dr. Marilyn Giroux
Brands
Would you say that a brand is valuable or an
asset for an organisation?
Why would you say that?
In what ways could a brand be an asset?
Product and Service Decisions
Indi
Investment and Portfolio
Analysis: Study Guide
Lecture & tutorial sessions: This
paper runs for 12 weeks, and has 1
lecture session of 1.5 hours and 1
tutorial session of 1.5 hours per week.
Textbook: Investment and Portfolio
Analysis, Course Number: 3960
Marketing, Advertising, Retailing, Sales:
501
Positioning in an
Omni Environment
REVIEW
3. You have learnt the basics of M.A.R.S. over the last 12 weeks,
here are some review questions to help you study for the exam:
1. Define and explain five touchpoints
Investment and Portfolio Analysis
Group Assignment 2
Question 1: Quantitative Research
For your next assignment your boss has assigned you to the research department of
A.P. Investments. The head of the research department has given you the following
task
WEEK 6 WORKSHOP HAND IN EXERCISES (for submission at start of Week 6
workshop)
Question 1 (Review question 1- page 239 of textbook)
Outline arguments for and against the use of the lower of cost and net realisable value
rule?
Question 2 (Review question 5