Which one of the following conditions cannot be a part of constraints for the portfolio optimization model?

Q: What are the implications of the weak‐form, semi-strong-form, and strong-form of the EMH for…

A: The Efficient Market Hypothesis (EMH) describes a stock market that is both operationally and…

Q: The following are investment constraints EXCEPT Unique needs Liquidity Time horizon Risk tolerance

A: Investment constraints are the factors that limit options for the investor which are outside their…

Q: Sales return 600 16 Sales 3,800 22 1,900 Purchase 38.60 29 Purchase return 300 38.60 30

A:

Q: lue (NPV) anc g decisions? Pl

A: Introduction : Net present value  can be understood as the value which depicts the actual worth…

Q: How do an investment's required rate of return vary with perceived risk? Explain with an example?

A: Required rate of return refers to the rate which the investors expects from their investments. This…

Q: What are the components of the risk-free rate?

A: risk free asset: it is the asset which does not carry any risk.

Q: Initial Cost Installation Cost Increase in NWC Salvage Value Units sold Depreciation Rate Years…

A: Net Present Value = Sum of discounted cash Inflows - Initial Investment

Q: What is the difference between a Put option and a Call option? Explain. Provide examples.

A: Option is a derivative instrument which gives a choice to its buyer to buy or sell the underlying…

Q: When Building a Portfolio Optimization Model, Exceeding the constraints would result in…

A: When building a portfolio optimization model, constraints play a crucial role in ensuring that the…

Q: How widely used is real option analysis?

A: Real option analysis is the analysis of a company’s opportunity cost of an investment or a…

Q: What assumptions underlie the EOQ model?

A: The model that helps in calculating the optimal amount of quantity needs to be purchase for…

Q: What are the most common DCF valuation models?

A: There are different types of DCF valuation models such as: 1.) BY using the terminal value technique…

Q: w does expected shortfal

A: Introduction : Value at risk (VaR) can be understood as the metric that measures the magnitude of…

Q: what is the difference between a call option and a put option?

A: There are two types of options one is call option and other is put option and both are derivative…

Q: explain what is the risk-return principle with one example

A: The risk-return principle is a fundamental concept in finance that states that the potential return…

Q: Explain Contraction risk?

A: Contraction risk may be a hazard that the backer of fixed-revenue securities faces. This hazard…

Q: When might NPS not be a good predictor of firmgrowth?

A: At times, the NPS might not be a good indicator of predictor of firm's growth as there are many…

Q: What does maturity matching mean, and what is the logic behindthis policy?

A: Maturity matching It is a financing strategy for working capital. Under this strategy, financing of…

Q: Suppose that we can describe the world using two states and that two assets are available, asset K…

A: The risk-neutral probability refers to the probability of a state occurring after it has been…

Q: 1. What causes volatility? Explain the basic assumption and research supported view.

A: Volatility is price variability of an asset. Risky assets' prices go up and down and that is called…

Q: What are the advantages of using duration as opposed to interest-sensitive gap analysis?

A: Asset liability management is a technique used to address the risks that financial institutions face…

Q: Does the IRR measure ignore the scale of investment?

A: The internal rate of return (IRR) is a capital budgeting metric used to gauge the benefit of…

Q: what is a portfolio as a profiling and self-reflection according to KODE model?

A: A portfolio as a profiling and self-reflection according to KODE model is a collection of a person's…

Q: Explain the difference between a linear risk and a nonlinear risk.

A: Linear risk is an enterprise's risk, based on the traditional economic system of "take-up-dispose."…

Q: What is risk, and how does it affect decisions about investment?

A: Risk and return are related to each other while making investment.

Q: 1. Which entry strategy has the least risk and why?

A: When a company is looking to enter a new market especially a new foreign market (i.e. a market in…

Q: What assumptions are inherent in the EOQ model as presentedhere?

A: Economic order quantity (EOQ): Economic ordering quantity (EOQ) is the perfect order quantity a…

Q: Why the prospect theory is important

A: Introduction:- Prospect theory is very important because it elaborates how we understand and value…

Q: What kind of investment is considered to be risk-free?

A: A risk-free investment is an investment that has a minimum or no fluctuation from the expected…

Q: Is the accept-or-reject decision rule the same as in the simple -investment case? Explain how?

A: Yes, accept or reject decision rule is the same as in the simple investment because accept or reject…

Q: What are the assumptions and criticisms of Gordon’s model?

A: Gordon's model, also known as the Gordon Growth Model, is a widely used method for valuing stocks.…

Q: What is the difference between YTD and YoY return? Provide an example

A: In the question they have asked regarding YTD and YOY differences between them so they will be…

Q: Calculate the risk neutral probability

A: Risk neutral probability = (er*Δt - d)/(u-d) r is risk free rate. Δt is time period between each…

Q: What is the purpose of NPV analysis? Be sure to discuss the concepts of risk and return in your

A: Net present value NPV is used quite extensively in capital budgeting decisions whether to accept or…