MaxMarkCh06QuestionsOnlyWord格式文档下载.docx

MaxMarkCh06QuestionsOnlyWord格式文档下载.docx

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variationsinproductivityatacompany’smainfactory

C:

changesinthecostofspecialisedlabour

D:

changesintheeffectivenessofacompany’smanagers

Feedback:

Changesininterestrateswillaffectthemarketasawholeandare,therefore,asourceofsystematicrisk.ThefactorsmentionedinBandDwouldonlyaffectreturnsforanindividualcompany;

while,forCtheeffectswouldbeconfinedtoasmallnumberofcompanies,soB,CandDareallsourcesofunsystematicrisk.

More:

FinancialInstitutions,InstrumentsandMarkets5/e,Section6.1,p.249.

Withinthecontextofinvestinginshareslistedonastockexchange,riskcanbecategorisedas

（1）systematic,and

（2）unsystematic.Systematicrisksarethoseriskexposuresthatwillhaveanimpactonsharepricesgenerallyinthemarket.Themajorityofshareslistedonaparticularstockexchangewillbeaffectedtoalesserorgreaterdegree.Theimpactmaybepositiveornegative.Examplesofsystematicriskexposuresinclude:

∙changesininterestrates

∙changesinexchangerates

∙contractionorexpansionineconomicactivity

∙introductionofnewlegislation

∙politicalstability

∙changesinmarketconfidenceandperception.

Question2:

systematicriskandunsystematicrisk.Whichofthefollowingisasourceofunsystematicrisk?

anincreaseinthecompanytaxrate

achangeinthevalueoftheAustraliandollar

replacementofacompany’schiefexecutive

theoccurrenceofawidespreaddrought

Replacementofachiefexecutiveisacompany-specificeventandis,therefore,asourceofunsystematicrisk.ThefactorslistedinA,BandDwouldhavemarket-wideeffects.

Ontheotherhand,unsystematicriskaffectsasinglecorporationorasmallgroupofcompanies.Examplesofunsystematicriskexposuresthatwillhaveanimpactonacorporationinclude:

∙theresignationofanexecutivemanager

∙achangeinfutureperformanceforecasts

∙thefailureoftechnologyorcommunicationsystems

∙dissentwithintheboardofdirectors

∙rumourorevidenceoffinancialdifficulty.

Question3:

Liquidityinastockmarketisimportanttoinvestorsbecauseifamarketisliquid:

therearemanylistedsecuritiestochoosefrom

thesecuritieslistedarelessriskythanunlistedinvestments

investorscangenerallybuyorsellsharesatthecurrentmarketprice

brokeragecostsarelow

Amarketisregardedasliquidiftherearemanybuyersandsellerspresentinthemarket.UnderthesecircumstancesalargeordertobuyorsellcanbeexecutedwithlittleornoeffectonthemarketpricesoCiscorrect.

FinancialInstitutions,InstrumentsandMarkets5/e,p.246.

Liquidityisattractivetoinvestorsinastockmarketbecausetheyknowthatinmostcircumstancestheyareabletobuyandsellsharesatthecurrentmarketprice.Thismeansthattheycanbuyandselllong-term,higher-risksecuritiesandatthesametimemaintainliquidityintheirinvestmentportfolio.Astockexchangemeasuresliquidityasthevolumeoftradingrelativetothesizeofthemarket.

Question4:

Investorsareoftenadvisedtoholdadiversifiedportfolio.Whichofthefollowingportfoliosoffersthegreatestdiversification?

sharesintendifferentbanks

tenstocksfromdifferentindustries

equalproportionsofAustralianshares,bondsandinternationalshares

sharesin25companiesthatwereselectedatrandom

Diversificationismoreeffectivewhenthecorrelationbetweenreturnsonsecuritiesislow.Forashareportfolio,effectivediversificationrequiresaspreadofcompaniesfromdifferentindustries.Greaterriskreductionwillbeachievedbyincludingotherassetclassessuchasbonds,propertyandinternationalshares.

FinancialInstitutions,InstrumentsandMarkets5/e,p.249.

Investmentchoicesavailablethroughshareslistedonastockexchangeenableaninvestortodiversifyawaymostoftheunsystematicrisk.Investmenttheorycontendsthatbyholdingadiversifiedinvestmentportfolioaninvestorisabletominimisetheriskexposuresassociatedwithinvestinginasingleshare.Adiversifiedinvestmentportfoliowouldincludearangeofinvestmentcategories,includingshares,fixed-interestsecuritiesandproperty.Thesharecomponentofaninvestmentportfoliowouldholdarangeofsharesacrossdifferentindustrygroupings.Itisgenerallyagreedthatadiversifiedshareportfoliowillincludesomewherebetweentenandtwenty-fivestocks.

Question5:

Investmentsmaybemanagedactivelyorpassively.Anactiveinvestmentapproachmaybemostaccuratelydescribedas:

tradingfrequentlyonanintra-daybasisaspriceschange

investinginshareswithhighbetas

usingtechnicalanalysistoguidetradingdecisions

attemptingtoachievesuperiorreturnsthroughsuccessfulstockselection

Anactiveinvestorinshareswillstructureaportfolioofsharesthatareexpectedtoprovidehigherreturnsthanothersandwillthenbuyandsellsharesasnewinformationbecomesavailable.Activeinvestmentdoesnotneedtoinvolveintra-daytradingorinvestingonlyinshareswithhighbetas,soAandBareincorrect.Whileanactiveinvestormayusetechnicalanalysis,itisnottheonlytechniquethatsuchinvestorsrelyon,soCisalsoincorrect.

FinancialInstitutions,InstrumentsandMarkets5/e,pp.249–250.

Investorsinthesharemarketmustalsodecidewhethertotakeanactiveorpassiveinvestmentapproach.Activeinvestmentinvolvesaninvestormakingstrategicstockselectionstostructureashareportfolio.Anactiveinvestorwillbuyandsellsharesbasedonnewinformationreceivedandchangesinpersonalriskandreturnpreferences.Twoactiveinvestmentapproaches,fundamentalanalysisandtechnicalanalysis,arediscussedindetailinChapter7.Eachoftheseapproacheswillinfluencethestructureandcompositionofaninvestmentshareportfolio.

Question6:

Whichofthefollowingstatementsaboutfundamentalanalysisandtechnicalanalysisiscorrect?

technicalanalysisfocusesonidentifyingtrendsinmarketindicesratherthaninthepricesofindividualshares

technicalanalysisisregardedasapassiveinvestmentapproach

fundamentalanalysisreliessolelyonanalysisofacompany’sfinancialstatements

technicalanalysisreliesheavilyonanalysisofsharepricedatawhereasfundamentalanalysisreliesonabroadersetofinformation

Technicalanalysisaimstofindandinterpretpatternsinpastsharepricedata.Fundamentalanalysisaimstofindmispricedsecuritiesbyanalysisoftheoutlookforacompany’sbusinessso,consistentwithD,itusesmuchmoreinformationthantechnicalanalysis.

FinancialInstitutions,InstrumentsandMarkets5/e,p.250.

Briefly,technicalanalysisconsiderstrendsthatareevidentovertimeinindividualsharepricesorgroupsofshareprices,asrepresentedinshare-marketindices.Technicalanalystscontendthathistory,ormarketbehaviour,willberepeatedfromtimetotime.Therefore,ifanemergingsharepricetrendcorrespondstoapastpricetrend,thereisanexpectationthatcurrentsharepriceswillreactastheydidpreviously.Sharepricetrendsareplottedongraphsusingarangeofquantitativetechniques,suchascalculatingathirty-daymovingaverageofpricemovements.

Thefundamentalanalysisapproach,ontheotherhand,considersthefinancialperformanceofacorporation.Thisinvolvestheanalysisoffinancialandaccountingratiossuchasthereturnonequity,thedebt-to-equityratio,thedebt-servicingcapacityandliquidity.Fundamentalanalysisalsoconsiderseconomicfundamentalsthatwillhaveanimpactontheperformanceofacorporationorthesharemarketgenerally.Examplesofeconomicfundamentalsincludeproductivitylevels,employmentlevels,thebusinesscycleandfiscalandmonetarypolicies.

Question7:

Toundertakedirectinvestment,thefirststeptakenbyanewinvestoris:

openanaccountwithastockbroker

buyunitsinamanagedfund

obtaindirectaccesstotheCLICKXTsystem

openanaccountwithacashmanagementtrust.

Directinvestmentmeansthattheinvestordirectlybuysshares,ratherthaninvestingindirectlyviaamanagedfund.IndividualinvestorsarenotabletogetdirectaccesstotheCLICKXTsystemandhavetotradethroughabroker.Whileanaccountwithacashmanagementtrustmaybeneededtosettletrades,thefirststepwouldbetoopenanaccountwithabroker,soAisthecorrectanswer.

FinancialInstitutions,InstrumentsandMarkets5/e,p.252.

Therearetwoapproachestobuyingandsellingsharesthroughastockexchange:

directinvestmentandindirectinvestment.Withthedirectinvestmentstrategy,aninvestorwillchoosetobuyorsellsharesdirectlythroughastockbroker.Chapter4discussesthebuyingandsellingofshareswithinthecontextoftheASX’selectronictradingandsettlementssystems:

CLICKXTandCHESS.ItmaybeusefultolookagainatFigure4.3,asitdepictstheprocessesofbuyingandsellingontheASX.

Question8:

Asmallinvestorwhowishestoinvestdirectlyinshareswiththelowesttransactioncostsshould:

directlyplaceorderswithastockexchangeviatheexchange’swebsite

useadiscountbroker

useafullservicebro