Practice Problem from Lecture 5 (Chapter 8)
Q1.
Calculate the expected return for ABC Berhad which has a beta of 0.83 when the risk free rate is 0.05 and
you expect the market return to be 0.12.
a. 14.96%
b. 16.15%
c. 10.81%
d. 17.00%
e. 15.25%
ANS: C
k =

Tutorial 5 Week 5
BFW3121 Investments and Portfolio Management
Chapter 7
Questions: 2, 9, 12 and 13
Problems: 3 and 4.
Use Excel to do the calculation for Question 3. Note that for problem 4, should not have the
expected value. So replace () by . Also not

Practice Problem from Lecture 4 (Chapter 7)
Q1.
A portfolio manager is considering adding another security to his portfolio. The correlations of the 5
alternatives available are listed below. Which security would enable the highest level of risk
diversifi

Solution to Practice Questions from Lecture 1
Question 1
(a)
Real rate of return on investment is the rate of return expressed in terms of goods and
services. It expresses how much more, or less if negative, goods and services the investor
can consume at

Solution to Practice Questions from Lecture 2
Question 1
Properties of a good financial market are
(1)
Availability of past transaction information as well as the availability of timely and
accurate information
(2)
Liquidity marketability, price continuit

Tutorial 3 Week3
BFW3121 Investments and Portfolio Management
Question 1 [Ch.4 P2]
Lauren has a margin account and deposits $50,000. Assume the prevailing initial margin
requirement is 40%, commissions are ignored, and the Gentry Wine Corporation is selli

Tutorial 2 - Week 2
BFW3121 Investments and Portfolio Management
Question 1
One of the objectives of investment is to postpone current consumption to future
consumption. However, more money in the future does not necessarily mean we would
be able to consu

Tutorial 4 Week 4
BFW3121 Investments and Portfolio Management
Question 1
Briefly explain the concept of efficient market hypothesis (EMH) and each of the three forms
strong, semi-strong and strong.
Solution:
In EMH, market efficiency means informational