T- 6.1 Problem 3: Evaluate the following cases of assets: 1-What would happen to

Question

T- 6.1

Problem 3:

Evaluate the following cases of assets:

1-What would happen to the performance of each asset if it reflects a 20% increase in performance

From the market?

2. What would happen to the performance of each asset if it reflects a 20% decrease in market performance?

3. If the market performance increased in the future, how active you prefer? Why?

4. If the market yield decrease in the future, how active you prefer? Why?

*** NOTE: No copying answers from other questions in this system are incorrect. IT IS VERY IMPORTANT TO COMPLETE THE ENTIRE EXERCISE. INCLUDE ALL CALCULATIONS. THANK

Explanation / Answer

1)If Market performance increases by 20%

A's performance will increase by 20*0.25 = 5%

B's performance will increase by 20*1.50 = 30%

C's performance will decrease by 20*0.25 = 5%

D's performance will increase by 20*0.99 = 19.80%

..

..

2)If Market performance decreases by 20%

A's performance will decrease by 20*0.25 = 5%

B's performance willdecrease by 20*1.50 = 30%

C's performance will increase by 20*0.25 = 5%

D's performance will decrease by 20*0.99 = 19.80%

..

3)If market performance increase in future Active - A,B,D will be preferred ..

..

4)If market performance decrease in future Active - C will be preferred

..

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