a)Consider the current rise in commodity prices in 2021. A lot of people will now say that
Question:
a)Consider the current rise in commodity prices in 2021. A lot of people will now say that all the signs were there and everyone knew it was coming. However, if you examine the facts, analysts or investment professionals who were warning of an impending problem at the time were either laughed at or ignored.
Question: Name the bias of these fund managers:
(only one possible answer)
Overconfidence bias.
Anchoring bias
Disjunction effect bias.
Hindsight bias.
b) The slope of the security market line (SML) represents the portion of an asset's expected return attributable to:
(only one possible answer)
diversifiable risk.
market risk.
total risk.
a idiosyncratic risk
b) Consider a portfolio that consists of three assets. All assets correlate with each other with a correlation rate of 0.5. All assets have a return of 5% and a risk of 12%. The risk-free rate is 2%.
Calculate the Sharpe Ratio of an equally weighted portfolio.
Management Accounting Information for Decision-Making and Strategy Execution
ISBN: 978-0137024971
6th Edition
Authors: Anthony A. Atkinson, Robert S. Kaplan, Ella Mae Matsumura, S. Mark Young