Doshi_Final Research Essay

You Answered Correct Answer Jensen (1968) E proposed a very influential idea: when assessing mutual fund performance, we should compare funds only after accounting for the risks they take (rather than simply comparing returns). To see his argument, draw a SML, and put one dot above the SML (call it A) and one dot below it (call it B) while A and B have the same beta. (a) Describe the investment opportunities here. Buy B and sell A in a way that the portfolio has zero market beta Buy A and sell B in a way that the portfolio has zero market beta Just buy A to reach the highest possible return

Business 123 Introduction to Investments  May I please have responses for the following questions that apply to the attached images? Thank you, Did the funds with the lowest risk ratings have low, moderate, or high returns compared to their category averages? How did the funds with the highest risk ratings perform relative to their category averages?  Which mutual funds are more attractive to you? Those with higher risk / higher reward or those with lower risk / lower rewards?

A mutual fund that aggressively seeks capital growth: # O A. will have an MER that is higher than a global fund. OB. will have an MER that is approximately the same as a T-bill fund. OC. will have an MER that reflects the increased costs of research. OD. will have an MR similar to that of a fixed-income fund.

A3) Finance You are an investor who is looking to invest into a fund. Given the following investment criteria, which fund would be the best fit? You are a long-term investor (less worried about liquidity) You still need some flexibility in being able to purchase/redeem the investment at fair value You prefer a fund that undertakes some tactical asset allocation (changing its strategy based on market conditions) You are comfortable with higher risk. Passively managed, index fund Actively managed, closed-end fund Passively managed, open-ended fund Actively managed, open-ended fund

Decide whether the following statement makes sense​ (or is clearly​ true) or does not make sense​ (or is clearly​ false). Explain your reasoning. I bought a fund advertised on the web that says it uses a secret investment strategy to get an annual return twice that of​ stocks, with no risk at all.Choose the correct answer below. A.The statement does make sense because this secret investing strategy must be a new financial planning strategy that does not incorporate the three traditional investment​ considerations: liquidity,​ risk, and return. B.The statement does not make sense because investing in stocks is​ low-risk to get high​ returns, thus getting higher returns than stocks with this secret strategy must mean the fund advertised on the web is​ low-risk, not no risk. C.The statement does make sense because the strategy indicates that the return is a predictable​ amount, thus the fund advertised on the web is a​ no-risk investment. D.The statement does not make sense because…

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Use the following to answer questions a. – f.       a. What is the alpha for Fund B? b. Based on alpha, which fund displays superior performance? c. What is the Sharpe ratio for Fund B? d. Based on the Sharpe ratio, which fund displays superior performance? e. Suppose you are an investment counselor with a new client, Jonsey, and that Funds A and B are the only options available in Jonsey's company sponsored retirement account. Jonsey has no other investments. Which fund would you recommend, and why? f. What additional evidence would make you more confident in your recommendation, that is, more confident that the fund you recommend has the ability to perform in the future? (Hint: The answer has nothing to do with the Treynor Index.)

3 9. The historical returns for two investments-A and B-are summarized in the following table for the period 2016 to 2020, Use the data to answer the questions that follow. a. On the basis of a review of the return data, which investment appears to be more risky? Why? b. Calculate the standard deviation for each investment's returns. c. On the basis of your calculations in part b, which investment is more risky? Compare this conclusion to your observation in part a. Review Only Click the icon to see the Worked Solution. a. On the basis of a review of the return data, which investment appears to be more risky? Why? (Choose the best answer below.) O A. The riskier investment appears to be investment B, with returns that vary widely from the average relative to investment A, whose returns show less deviation from the average. O B. Investment A and investment B have equal risk because the average returns are the same. O C. The riskier investment appears to be investment A, with returns…

Two tales of behavioral biases: You are a portfolio manager of a prestigious Investment Management company, and two of your clients have reached you to share their thoughts about their portfolio performances: • Mathew: “Hello, I have lost a lot of money in the last two quarters! I know that I asked you to invest my money into a very aggressive mutual fund even though you said that it did not fit my investor profile. I know, I know, but I now need to recover. I want you to move my money from this aggressive mutual fund to a technology fund that has done excellent in the last year. Thus, the potential return from this fund is higher, and I think that I can recover from my losses.” • Carol: “I wanted to thank you for the extraordinary performance of my portfolio in the last few quarters. I think that this situation will not continue in the future, however. Six consecutive quarters of gain? Come on, a loss is overdue, you know? Should I move my money elsewhere? Or, if we keep the money in…

Hedge funds are known for generating higher returns. Discuss the investment strategies that are commonly used by hedge funds and critically assess the ability of hedge funds in generating excess returns by drawing on empirical evidence available in the literature.

‘To capture investor interest, Exchange Traded Funds (ETF) have become the latest market innovation. Since 1990, they have been actively traded in a form of basket of securities.’ Assess the main features of exchange traded funds (EFTs) drawing on their advantages and disadvantages as the cause of their popularity. Advantages Diversification Can be traded like stocks Lower fees for passively managed ETFs Reinvestment of dividends No minimum investment amount needed Lower capital gains compared to actively managed mutual funds. Discounts and premium prices are lower Disadvantages Lower levels of diversification Overkills intraday pricing Costs could be higher than mutual funds-broker fees Dividend yields are generally low. Returns on leveraged ETFs can be skewed

​(Computing the standard deviation for an individual​ investment)  James Fromholtz is considering whether to invest in a newly formed investment fund. The​ fund's investment objective is to acquire home mortgage securities at what it hopes will be bargain prices. The fund sponsor has suggested to James that the​ fund's performance will hinge on how the national economy performs in the coming year. ​ Specifically, he suggested the following possible​ outcomes:   LOADING... .   a.  Based on these potential​ outcomes, what is your estimate of the expected rate of return from this investment​ opportunity? b.  Calculate the standard deviation in the anticipated returns found in part a. c.  Would you be interested in making such an​ investment? Note that you lose all your money in one year if the economy collapses into the worst state or you double your money if the economy enters into a rapid expansion.   State of Economy Probability Fund Returns Rapid expansion and recovery…

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Question 5 a) “If markets are semistrong-form efficient, investors would only adopt passive investment strategies and buy into an index fund, rather than active strategies where they would have a portfolio manager select the components of their portfolios and seek for mispriced equities.” Explain if you agree with this statement, in no more than 150 words.

Please correct answer and don't use hand rating

Q1. Invesco Charter A famously advertises their superior performance relative to the S&P 500 over several decades. True, but the key to that performance was their early returns. You would have under-performed the S&P 500 had you invested with them after the 1970s until today. True/False Q2. If you have a choice between a fund with front loads or a fund with 12b-1 fees, always choose funds with 12b-1 fees because they are smaller True/False

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Benefits of diversification. Sally Rogers has decided to invest her wealth equally across the following three assets: En a. What are her expected returns and the risk from her investment in the three assets? How do they compare with investing in asset M alone? Hint Find the standard deviations of asset M and of ti assets M, N, and O. b. Could Sally reduce her total risk even more by u tandard deviation - X i Data Table a. What is the expected return of investing equally % (Round to two decimal places.) (Click on the following icon in order to copy its contents into a spreadsheet.) States Probability Asset M Returm Asset N Retum Asset O Retum 21% 12% -2% 25% 53% Boom 10% Normal 7% 7% Recession 22% 2% 1% 10% Print Done

basic economics can give us the sniff test. It provides us with a basic set of rules to which any decent investment advice must conform." These "set of rules" include all of the below EXCEPT THIS ONE. Which of the below is NOT one of these rules for wise investment? Group of answer choices   Invest for the long run.   Take risk, earn reward,.   Engage in high risk short-term trading.   Diversify your investments.

QUESTION 1 What is the primary advantage of owning mutual funds over individual securities? Mutual funds offer free checking. Fees of actively managed funds are generally quite low. Managers of mutual funds are much more likely to pick winning stocks than are you. Pooling of money from many investors enables the fund to buy many different securities and achieve the benefits of diversification.