Questions from General Investment

Q: Briefly discuss holding period return (HPR) and yield as measures

Briefly discuss holding period return (HPR) and yield as measures of investment return. Are they equivalent? Explain.

Q: Distinguish between the types of dividend distributions that mutual funds make.

Distinguish between the types of dividend distributions that mutual funds make. Are these dividends the only source of return for a mutual fund investor? Explain.

Q: Under what three conditions would an investment holding be a candidate for

Under what three conditions would an investment holding be a candidate for sale? What must be true about the expected return on a risky investment, when compared with the return on a low-risk investme...

Q: What is a problem investment? What questions should one consider when

What is a problem investment? What questions should one consider when analyzing each investment in a portfolio?

Q: What is active portfolio management? Will it result in superior returns

What is active portfolio management? Will it result in superior returns? Explain.

Q: Describe the steps involved in measuring portfolio return. Explain the role

Describe the steps involved in measuring portfolio return. Explain the role of the portfolio’s HPR in this process, and explain why one must differentiate between realized and unrealized gains.

Q: Why is comparing a portfolio’s return to the return on a market

Why is comparing a portfolio’s return to the return on a market index inadequate?

Q: Briefly describe each of the following measures for assessing portfolio performance and

Briefly describe each of the following measures for assessing portfolio performance and explain how they are used. a. Sharpe’s measure b. Treynor’s measure c. Jensen’s measure (Jensen’s alpha)

Q: Why is Jensen’s measure (Jensen’s alpha) generally preferred over the

Why is Jensen’s measure (Jensen’s alpha) generally preferred over the measures of Sharpe and Treynor for assessing portfolio performance? Explain.

Q: Justin Lieberman must earn a minimum rate of return of 9.

Justin Lieberman must earn a minimum rate of return of 9.25% as compensation for the risk of the following investment. a. Use present value techniques to estimate the IRR on this investment. b. On the...