Sally, your secondary classmate who recently joined the asset management industry, shared the following information with you: The yield to maturity on the treasury bonds and the market risk premium is 3% and 5% respectively. Appraise which security (i.e. Apple or Amazon) is more risky, and examine which security(ies) you will include in your investment portfolio. No computations are require, the answer should be in paragraphs

An investor receives an investment newsletter that recommends that she invest in a stock that has doubled the return of the S&P 500 in the last two months. It also claims that this stock is a "safe bet" for the future. Which of the following statements is correct regarding this information? The investment newsletter contains contrary information since the stock must be a high risk and therefore cannot also be a "safe bet." This investment newsletter is most likely correct because they most likely have some special knowledge about the stock. It is common for individual stocks to double the return of the S&P 500 and still be a "safe bet."

Frank Meyers, CFA, is a fixed-income portfolio manager for a large pension fund. A member of the Investment Committee, Fred Spice, is very interested in learning about the management of fixed-income portfolios. Spice has approached Meyers with several questions.Meyers decides to illustrate fixed-income trading strategies to Spice using a fixed-rate bond and note. Both bonds have semiannual coupon periods. Unless otherwise stated, all interest rate changes are parallel. The characteristics of these securities are shown in the following table. He also considers a 9-year floating-rate bond (floater) that pays a floating rate semiannually and is currently yielding 5%.  Characteristics of Fixed-Rate Bond and Fixed-Rate Note   Fixed-Rate Bond Fixed-Rate Note Price 107.18 100.00 Yield to maturity 5.00% 5.00% Time to maturity (years) 18 8 Modified duration (years) 6.9848 3.5851   Spice asks Meyers to quantify price changes from changes in interest rates. To illustrate, Meyers…

Adam Smith is a portfolio manager with Point72 Investments, a U.S.-based asset management firm. Smith is considering using options to enhance portfolio returns and control risk. He asks his junior analyst, Tommy Lee, to help him.  Lee collected and summarize the relationship between a European call option and various factors that might impact the call option value in Table 1. Which of the relationships shown in Table 1 below is incorrect? (Choose the best answer) Table 1 Impact of Increasing the Variables on put option value Variables Impact on put option value Stock price Decrease Strike Price Decrease Maturity Increase Volatility Increase Interest rate Decrease Dividend Increase     Volatility and Stock Price     Risk-free rate and Volatility     Dividend and stock price     Maturity and Strike Price     Stock Price and Interest Rate