INVESTMENTANALYSIS (FINA350)
Part 1
1. What macroeconomic and microeconomic factorscontribute tochangesin the required rate of return for individual investments and investments in general?Explain each of them.
2. Explainthe purposeand function of acapitalmarket?
3. Explainin detailthe characteristics that determine the qualityofacapital market?
4. What isthe difference between a primaryand secondarycapital market and howdo these markets support each other?Explain in detail.
5. Explainthe specific factors that contribute to an efficientmarket?
6. Given the overall efficientmarket hypothesis,what are the three sub- hypotheses andwhatare theimplicationsofeach?Explain.
7. What specificratioshelp determine afirm’sinternal liquidity, operating performance,risk profile, growthpotential, and externalliquidity?Explain each with example.
8. Howcan the DuPontanalysishelp evaluate afirm’s return on equityover time? Explain.
Part 2
1. What dowemeanbyriskaversionandwhat evidenceindicatesthat investors are generallyrisk averse?Explain in detail.
2. Explainthe basicassumptions behind theMarkowitz portfolio theory?
3. What ismeantbyriskandwhat aresomeofthe alternative measures of risk used ininvestments?
4. What are themainassumptions of the capital asset pricing model?Explain each assumption.
5. What isarisk-free asset andwhat areits risk-return characteristics?
6. Defineportfoliomanagement. Howdowemeasure diversification for an individual portfolio?
7. What issystematic and unsystematic risk?Howtheyaffectthebusiness?Explain.
8. Howdoes the goal ofapassive equityportfolio manager differ from the goal of an active manager?Explain.