The primary goal of both domestic and international portfolio managers is * maximize their WACC All the above to maximize return for a given level of risk or minimize risk for a given level of return minimize the number of unique securities held in their portfolio

QUESTION ONE Why do most investors hold diversified portfolios? and What is covariance, and why is it important in portfolio theory? Why do most assets of the same type show positive covariances of returns with each other? Would you expect positive covariances of returns between differenttypes of assets such as returns on Treasury bills, General Electric common stock, and commercial real estate? Why or why not? What is the relationship between covariance and the correlation coefficient? and Explain the shape of the efficient frontier. Draw a properly labeled graph of the Markowitz efficient frontier. Describe the efficient frontier in exact terms. Discuss the concept of dominant portfolios, and show an example of one on your graph. Assume you want to run a computer program to derive the efficient frontier for your feasible set of stocks. What information must you input to the program?

5

Why does portfolio analysis advantage is its graphic depiction facilitates communcation?

Question 5 a) “If markets are semistrong-form efficient, investors would only adopt passive investment strategies and buy into an index fund, rather than active strategies where they would have a portfolio manager select the components of their portfolios and seek for mispriced equities.” Explain if you agree with this statement, in no more than 150 words.

Describe a strategy development as you try to grow your money. Remember to mention day trading, short and long-term investments, risk- averse, risk tolerance, etc.