NOTE: This sample test should only be used as a guide to the styles of questions. The topics covered here are not exhaustive. Your revision should not be based on these set of questions only. The level of difficulty of this sample test is also NOT indicative of the level of difficulty of the actual test. The answers are provided at the end of the document. 1. A reasonable estimate of the annual standard deviation of return of the stock market would be? a. Less than 5 percent. b. Between 5 and
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Elton and Brown‚ Stewart (1980) “Biased Estimators and Unstable Betas”‚ The Journal of Finance‚ March‚ Vol Sharpe W F (1963)‚ “A Simplified Model for Portfolio Analysis” Management Science”‚ Vol. Sharpe‚ William F. 1964. "Capital Asset Prices: A Theory of Market Equilibrium under Conditions of Risk." Journal of Finance‚ V Siegel‚ A.‚ (1995) “Measuring Systematic Risk Using Implicit Beta”‚ Management Science‚ 41‚
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Atomic energy By: Hiram A. Murray III Background info The origin of the phrase atomic energy check in from the years of 1905-10. It is defined as energy released by reactions within atomic nuclei‚ as in nuclear fission or fusion. Now a days it is referred to Nuclear energy. Nuclear power uses fission (splitting atom nuclei) to produce energy. Atom nuclei is also none as the nucleus (center of the atom). Around 6% of the world’s energy and 14% of the world’s electricity is produced by nuclear
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the Atomic Mass # differ from the Atomic #? The atomic mass differs from the atomic number by the fact that the atomic mass is composed of the total number of protons and neutrons in the nucleus‚ and the atomic number is the number of protons found in the nucleus‚ and is identical to the charge of the atom. 3) What is an isotope? Give an example (show how it is an isotope). An isotope is a form of the same atom that differs from the original atom in atomic mass
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CHAPTER 6 RISK‚ RETURN‚ AND THE CAPITAL ASSET PRICING MODEL True/False Easy: | |(6.2) Payoff matrix |Answer: a |EASY | |[i]. |A payoff matrix shows the set of possible rates of return on an investment‚ along with their probabilities of occurrence‚ and the | | |investment’s expected rate of return as found by multiplying each outcome or "state" by its probability.
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Will My Risk Parity Strategy Outperform? Robert M. Anderson∗ University of California at Berkeley Stephen W. Bianchi† University of California at Berkeley Lisa R. Goldberg‡ MSCI and University of California at Berkeley November 10‚ 2011§ Abstract We gauge the return-generating potential and risk inherent in four investment strategies: value weighted‚ fixed mix‚ and levered and unlevered risk parity‚ over an 85-year horizon. There are three essential conclusions from our study. First‚ even over periods
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model. The model finds the optimum portfolio to hold in the situation where an investor considers that most securities are priced effectively‚ but believes he has information that can be used to predict an abnormal performance of a few of them. The theory behind the model is presented‚ along with numerical examples to highlight specific realistic investment scenarios and how the model performs for each‚ showing the advantages and disadvantages of the model. 1 Introduction In developing investment
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Testing the Capital Asset Pricing Model And the Fama-French Three-Factor Model By Jiaxin Ling (Cindy) March 19‚ 2013 Key words: Asset Pricing‚ Statistical Methods‚ CAPM‚ Fama-French Three-Factor Model Abstract: This paper examines the Capital Asset Pricing Model(CAPM) and the Fama-French three-factor model(FF) and the Fama-MacBeth model(FM) for the 201211 CRSP database using monthly returns from 25 portfolios for 2 periods ---July 1931 to June 2012 and July 1631 to June 2012. The theory’s
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The Atomic Bomb: Beneficial or Disastrous? Was dropping the atomic bomb on Hiroshima and Nagasaki at the end of World War II the most affective action that the United States could have taken? In the American eyes it was a good punishment on Japan in response to the Pearl Harbor attacks on December 7‚ 1941. The way the Japanese leaders launched the fighter planes that came in a destroyed many U.S. naval ships and took thousands lives‚ including soldiers and innocent bystanders‚ was a completely immoral
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Using Excel=s Solver Tool in Portfolio Theory Excel contains a tool called the Asolver@ that lets you maximize or minimize functions subject to general constraints. We will use this tool to compute the global minimum variance portfolio and the tangency portfolio for the three-firm example (see the spreadsheet 3firm.xls). The spreadsheet for this tutorial is called solverex.xls. The data for this example are given in the following table Stock 1 2 3 E[R] 0.229 0.138 0.052 VAR(R) 0.924 0.862 0.528
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