Security analysis has no place in modern portfolio theory.
Select one:
True
False
Answer: false
Securities are financial instruments (like share, debenture, and bond). The analysis of these instruments gives proper value of it.
The portfolio theory indicates how the best return could be availed with having the minimum possible risk for risk-averse investors, those who prefer to have lower risk; without the security analysis, this is not possible; therefore, it becomes an integral part and has important place in the theory.
Security analysis has no place in modern portfolio theory. Select one: True False
True or False: Darwin’s theory of evolution was greatly influenced by the hypothesis that modern geologic features were produced over many years by the accumulated effects of geological processes. True False
Discuss briefly the concept of CAPM and APT in terms of modern portfolio theory?
Please answer question b 1a. Describe how modern portfolio theory can be applied to manage the credit risk of a loan portfolio. The core idea in modern portfolio theory is that one can reduce risk without compromising on returns using the strategy of diversification. In other words, mean return per unit of risk (say, variance or beta) can be maximized by constructing a well diversified portfolio. Since the risk factors in a loan portfolio are dependent upon sectors, geographies, term...
Please answer question b 1a. Describe how modern portfolio theory can be applied to manage the credit risk of a loan portfolio. The core idea in modern portfolio theory is that one can reduce risk without compromising on returns using the strategy of diversification. In other words, mean return per unit of risk (say, variance or beta) can be maximized by constructing a well diversified portfolio. Since the risk factors in a loan portfolio are dependent upon sectors, geographies, term...
Under MPT (Modern Portfolio Theory), what do the risk-free rate and the optimal risky portfolio create and why is it important relative to all other possible portfolios (with the exception of the optimal risky portfolio)?
Under MPT (Modern Portfolio Theory), what do the risk-free rate and the optimal risky portfolio create and why is it important relative to all other possible portfolios (with the exception of the optimal risky portfolio)?
True or False: HIO3 is a stronger acid than HIO2 Select one: True False True or False: H2PO4 is a stronger acid than HPO47- Select one: True False True or False: H2S is a stronger acid than H2Se Select one: True False True or False: He is a stronger acid than HCI Select one: True False True or False: H2SO4 is s stronger acid than H2SO3 Select one: True False
Harry Markowitz' 1952 dissertation, 'Portfolio Selection' revolutionized modern finance creating MPT (modern portfolio theory). As useful as Markowitz' paradigm of mean-variance optimization is, what are shortcomings of the methodology in practice? Mean-variance optimization assumes that prior returns of assets are indicative of their future returns. Mean-variance optimization assume that the prior correlations between assets will hold into the future (for example, that A and B's correlation estimated over the prior period will hold into the next period). Mean-variance optimization assumes...
Are the following sentences describing the modern proactive purchasing and purchasing strategy true or false, in modern proactive (opposite is reactive) purchasing strategy? Short explanation / reasoning Why? Th theory claims that: Emphasis is in the strategy – not in today Plenty of suppliers means low cost Purchasing is a main management function Purchasing contributes to making markets to final customers Purchasing price is key variable in purchasing Win / loss negotiation situation in contracting is evident Information is valuable...
Please select True or false and explain why true or false 1. Game theory is a useful tool only if every player has a “dominant strategy.” 2. Some technologies are characterized for using factors of production in fixed proportions. However, this cannot be captured by a Cobb Douglas production function. 3. A backward bending supply curve will generate two equilibria; one of them will be stable, while the other one will be unstable. 4. In a game, if both players...