Question 1: As discussed during our class sessions there has been a significant growth of ETFs within the portfolio construction process and the implementation of ETFs within the portfolio construction (either fixed income and equity portfolios) had a significant impact within the portfolios behaviour. Please explain in a detailed manner the advantages and disadvantage of having exposure to ETFs within a portfolio. Question 2: One of the main advantages of having a portfolio is the diversification and the ability to minimize risk please explain in a detailed manner the hedging concept within a portfolio please mentioning the advantages and disadvantages of hedging. Question 3: Passive portfolios have been increasing in terms of popularity within the investment community vs. active portfolios during the last 30 years please explain in a detailed manner the difference between managing passive portfolios and active portfolios. Question 4: Volatility is one of the main indicators of the risk inherent within a portfolio. What do you think it would happen to the expected return of the portfolio if the portfolio manager would increase the overall portfolio volatility. Please justify your answer.