FIN 402 All DQs

Week 1

What are capital market instruments? How are they used? Which is most important? Explain your answer.

What is an asset class? How are asset classes selected? What factors affect the selection?

Let us assume economic forecasts predict falling gross domestic product and high inflation over the next couple of years. Based on this information, if you were a portfolio manager, what would your recommendations be for investing in the construction industry? Why? What about investing in the health care industry? Why?

Week 2

What are liquidity ratios? Why are they important? How may an investor use liquidity ratios when making investment decisions?

What are different ratio categories? Which category is most important to bondholders? Why? Which category is most important to stockholders? Why?

What items must be considered in a financial statement analysis? Which ratio categoryliquidity, profitability, or solvencyis most important when conducting financial analysis? Why?

What is the CAPM? Are CAPM assumptions realistic? Why or why not?

Week 3

What is the relationship between inflation and interest rates? How does this relationship affect asset prices? How does the unemployment rate affect interest rates? How do changes in interest rates affect the balance of payments?

What is the difference between systematic and unsystematic risk? How is the beta coefficient used to assess risk? Is it better to maximize return or minimize risk? Why?

What factors must be taken into consideration when creating an investment portfolio? How must a portfolios components be weighted? Is it important to calculate the weighted average risk? Why or why not?

Week 4

What are characteristics of an efficient portfolio? How are a portfolios return and standard deviation determined? How must assets be evaluated to achieve a minimum variance portfolio? Explain your answer.

What are examples of active and passive portfolio management techniques? Why would a portfolio manager pursue active instead of passive techniques? Is it ever preferable to use a passive technique? Why or why not?

Does international diversification enhance risk reduction? Why or why not? What measures may be taken to reduce risks of international portfolio investing?

Week 5

What are different types of alternative investment vehicles? Which is preferable? Why? What factors could affect the choice of such a vehicle?

What are derivatives? How may they be used to manage a portfolio?

What is an individual retirement account? Is it important to have an individual retirement account? Why or why not?