5 Written questions
5 Multiple choice questions
- 1. determine those needed
2. investigate historical performance
3. identify valuation model
4. collect good data
5. use judgment to interpret current investment conditions
6. formulate capital market expectations
7. monitor performance/refine process
- 1. Responsible fiscal and monetary policies?
2. What is the expected growth?
3. Does the country have reasonable currency values and current account deficits?
4. Is the country too highly levered?
5. What is the level of foreign exchange reserves relative to short-term debt?
6. What is the government's stance regarding structural reform?
- let past disasters or dramatic events weigh too heavily on their forecasts
- overly conservative in forecasts because you want to avoid the regret from making extreme forecasts that could end up being incorrect
- often measured using the inventory to sales ratio
4 True/False questions
Taylor Rule → r_target = r_neutral + [0.5(GDP_exp - GDP_trend) + 0.5(i_exp - i_target)]
alpha research → concerned with earning excess returns through the use of specific strategies within specific asset groups
shrinkage estimators → weighted averages of historical data and some other estimate, where the weights and other estimates are defined by the analyst
savings-investment imbalances approach → weighted averages of historical data and some other estimate, where the weights and other estimates are defined by the analyst