Investment Portfolio Management Practice Questions & Answers
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Investment Portfolio and CAPM Practice Solutions
- Question 1: Portfolio beta (0.6)
- Question 2: Expected return under CAPM (7%)
- Question 3: Expected return with new allocation (6.5%)
- Question 4: Passive investment strategy (Zero alpha)
- Question 5: Net Asset Value calculation ($50)
- Question 6: Definition of NAV (Market value of assets minus liabilities divided by shares outstanding)
- Question 7: Portion of market risk (64%)
- Question 8: Mutual fund return after expenses (4.5%)
- Question 9: Net Asset Value City Street Fund ($40)
- Question 10: Impact on portfolio value (Decreases to $460 million)
- Question 11: Impact on shares outstanding (Decreases to 9 million)
- Question 12: New NAV after shares sold ($40)
- Question 13: Risk premium for stocks (60%)
- Question 14: Optimal