Question: QUESTION 6 (20 MARKS) (a) Distinguish between active and passive portfolio management. (5 marks) (b) Describe three strategies of active portfolio management. (9 marks) (c)

QUESTION 6 (20 MARKS)

(a) Distinguish between active and passive portfolio management. (5 marks)

(b) Describe three strategies of active portfolio management. (9 marks)

(c)

Port folio Return (%) Std Dev (%) (Beta)
A 40% 55% 0.8
B 30% 35% 1

Risk free rate of return is 18%.

Calculate for both portfolios:

(a) Sharpe Ratio. (3 marks)

(b) Treynor Ratio. (3 marks)

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