Does research affiliates believe stock market is efficient

Assignment Help Business Management

Reference no: EM132885819

1. (Executive summary) Based on your analysis in the following questions, would you endorse the RAFI strategy to any of your institutional clients? (Hint: How much weight should you put on that asset in a portfolio?)

2. Does Research Affiliates believe the stock market is efficient? Why does Research Affiliates think the Fundamental Index strategy produces better weights than the standard cap-weighted approach? (Avoid using case-specific jargon terms like "economycentric")

3. Even if Research Affiliates views about fundamental weights being better than market cap weights were true, are there any extra costs/expenses for using fundamental weights in trading strategies that would not be present using market-cap-based weights?

4. Look at Exhibit 14 in the case. In this exhibit, what kinds of stocks get relatively more weight in the fundamental index strategy compared to the (cap-weighted) Russell 1000?

5. Did the RAFI ETF earn CAPM alpha leading up to this decision? The data is on Canvas. Note that this ETF was essentially the only means investors had to actually invest real money using the fundamental index methodology.

6. RAFI's sales pitch was based on the analysis in Exhibit 4. Notice the time period of their analysis and read the notes at the bottom of the Exhibit. Do you have any reason to trust your analysis more than RAFI's analysis in Exhibit 4?

Reference no: EM132885819

Questions Cloud

Disney business financial health : You will analyze and evaluate Disney (DIS) business's financial health and recommend the best financing options for the business

Most critical in global economy : Of the problems that affect the success of an acquisition, which one do you believe is the most critical in the global economy?

Part of bank evaluation process : As part of the bank's evaluation process, you have been asked to take an examination that covers several financial analysis techniques.

Construct scatter plot with data : Construct a scatter plot with this data. Do you observe a trend? If so, what type of trend do you observe?

Does research affiliates believe stock market is efficient : Does Research Affiliates believe the stock market is efficient? Why does Research Affiliates think the Fundamental Index strategy produces better weights

Cryptocurrency have on small businesses : What impact does Cryptocurrency have on small businesses? How can it change the way businesses function? Write to prove that cryptocurrency is the future.

Goal despite obstacles and limited opportunities : What aspects of their athletic role may contribute to continuing to work toward a goal despite obstacles and limited opportunities?

Work breakdown structure : What differentiates a list of project requirements from a Work Breakdown Structure (WBS)? How do you handle resource overallocation?

Passion from my leadership philosophy : What goals will I focus on to continue my leadership journey? Discuss how my goals align with my purpose/values/passion from my leadership philosophy.

User Account

All Pages