Questions from General Investment

Q: What is a common weakness of Jensen’s alpha and the Treynor ratio

What is a common weakness of Jensen’s alpha and the Treynor ratio?

Q: Explain the relationship between Jensen’s alpha and the security market line (

Explain the relationship between Jensen’s alpha and the security market line (SML) of the capital asset pricing model (CAPM).

Q: What are one advantage and one disadvantage of the Sharpe ratio?

What are one advantage and one disadvantage of the Sharpe ratio?

Q: Given Ms. Nguyen’s estimate of Country Point’s terminal value in 2014

Given Ms. Nguyen’s estimate of Country Point’s terminal value in 2014, what is the growth assumption she must have used for free cash flow after 2014? a. 7 percent b. 9 percent c. 3 percent

Q: What is meant by a Sharpe-optimal portfolio?

What is meant by a Sharpe-optimal portfolio?

Q: Explain the meaning of a Value-at-Risk statistic in

Explain the meaning of a Value-at-Risk statistic in terms of a smallest expected loss and the probability of such a loss.

Q: The largest expected loss for a portfolio is −20 percent with

The largest expected loss for a portfolio is −20 percent with a probability of 95 percent. Relate this statement to the Value-at-Risk statistic.

Q: A closed-end fund has total assets of $240 million

A closed-end fund has total assets of $240 million and liabilities of $110,000. Currently, 11 million shares are outstanding. What is the NAV of the fund? If the shares currently sell for $19.25, what...

Q: Able, Baker, and Charlie are the only three stocks in

Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for $93, $312, and $78, respectively. If Baker undergoes a 2-for-1 stock split, what is the new divisor for the price-we...

Q: In Problem 1, assume that Baker undergoes a 4-for

In Problem 1, assume that Baker undergoes a 4-for-1 stock split. What is the new divisor now? Data from Problem 1: Able, Baker, and Charlie are the only three stocks in an index. The stocks sell for...