Investment Management

Assignment:

Investment Management

Programme: Master in Finance (MFIN)

Subject: Investment Management

Student Name: Chan Yee Teen (1101e12464)

Lecturer: Dr Chander Shekhar/ Mr. Koh Boon Cheng

CONTENTS

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1. Question 1---------------------------------------------------------------------------------3

2. Question 2 --------------------------------------------------------------------------------4

3. Question 3---------------------------------------------------------------------------------7

4. Question 4---------------------------------------------------------------------------------8

5. Question 5-------------------------------------------------------------------------------11

6. Question 6-------------------------------------------------------------------------------12

7. Question 7-------------------------------------------------------------------------------14

8. Question 8-------------------------------------------------------------------------------15

9. Question 9-------------------------------------------------------------------------------17

Question 1:

| |Bad |Normal |Good |

|Probability |0.25 |0.4 |0.36 |

|Stock AA |-18% |6% |12% |

|Stock BB |-20% |9% |16% |

a) Find the expected rates of return for Stocks AA, and BB.

Expected Rate of Return

(I) For Stocks AA

Stocks AA = (-18%) (0.25) + (6%) (0.4) + (12%) (0.35)

= 0.021 or 2.1%

(II) For Stocks BB

Stocks BB = (-20%) (0.25) + (9%) (0.4) +...