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#### Book - Essentials of Applied Portfolio Management

# Chapter 1. Introduction to Portfolio Analysis: Key Notions

B) The net (compounded) return over three years is 10.90%. C) The compounded annual growth rate (CAGR) of the investment is 3.67%. D) Both A and C are correct. E) None of the above is correct. Consider the case in which an investment of yours has given the following annual, simple returns:
Period
Return
2013
5.5%
2014
-4.0%
2015
9.5%
Which one of the following statements ...

Exercises - Download This book offers an essential introduction to modern portfolio theory. The book provides a number of simple, practical examples to allow the reader to apply the theoretical concepts presented in each chapter. A portion of such practical cases are worked out in Excel and made available here in the attached .zip file.

#### Book - Essentials of Applied Portfolio Management

# Chapter 6. Human Capital, Background Risks, and Optimal Portfolio Decisions

B) Mary should invest in CreditDebit stocks or bonds if and only if her risk tolerance is high. C) Mary should invest in CreditDebit stocks: because she works for the company, she will probably get incentives to buy company’s stocks. D) With the information that is provided, we cannot say whether Mary should invest in CreditDebit stocks and bonds. E) None of the above. If Mary works as an associate ...

B) She needs to check whether, given her asset menu, it is possible to build a portfolio that is characterized by the same expected return but a lower variance; in case this is not possible, she this will guarantee to her that her portfolio is efficient. C) She needs to check whether, given her asset menu, it is possible to build a portfolio that is characterized by the same expected return but a ...

#### Book - Essentials of Applied Portfolio Management

# Chapter 7. Performance Measurement and Attribution

B) The average time weighted return over these three days is positive while the average simple return is negative. C) Both the average time weighted return and the average simple returns are positive. D) Both the average time weighted return and the average simple returns are positive. E) The average time weighted return is zero while the simple return is positive. The table shows the daily inflows ...

#### Book - Essentials of Applied Portfolio Management

# Chapter 4. Optimal Portfolio Selection: A Few Analytical Results

B) The necessary and sufficient condition for risky assets to be demanded is that at least one risky asset has a strictly positive mean return. C) The necessary and sufficient condition for risky assets to be demanded is that at least one risky asset has a strictly positive risk premium. D) The necessary but not sufficient condition for risky assets to be demanded is that at least one risky asset ...

#### Book - Essentials of Applied Portfolio Management

# Chapter 2. Choice under Uncertainty and State-Preference Approach to Portfolio Decisions

B) Mary and John are characterized by the same preference relation across consumption bundles while Max has different preferences. C) Mary, Max and John are all characterized by the same preference relation across consumption bundles. D) Max and John are characterized by the same preference relation across consumption bundles while Mary has different preferences. E) Mary, Max and John are all characterized ...

#### Book - Essentials of Applied Portfolio Management

# Chapter 5. Mean-Variance Theory at Work: Single and Multi-Index (Factor) Models

B) If he does not specify any pricing model for the stocks, John needs to estimate 11,475 parameters so he would need approximately 32 years of weekly data to get an acceptable saturation ratio of 20. C) If he does not specify any pricing model for the stocks, John needs to estimate 11,475 parameters so he would need just less than 7 years of monthly data to get an acceptable saturation ratio of 20. ...

AI and Runaway Transformation in Financial Services
Artificial intelligence is driving the next revolution in banking, with disruptive forces presenting profound challenges to traditional business models. As the adoption of new technologies, and innovation of even newer ones, accelerates, are we fast approaching a future in which banks no longer have a need for assets or, indeed, for humans?
Is there ...