Investment analysis and portfolio management

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Reference no: EM13954623

Problems for Finance - "Investment Analysis & Portfolio Management"

Authors Reilly & Brown

Problem #1. Explain the following statements: (a) There is a strong consistent relationship between money supply changes and stock prices. (b) Money supply changes cannot be used to predict stock price movements.

Problem #2. The current rate of inflation is 3%, and long-term treasury bonds are yielding 7%. You estimate that the rate of inflation will increase to 6%. What do you expect to happen to long-term bond yields? Compute the effect of this estimated change in inflation on the price of a 15-year, 10% coupon bond with a current yield to maturity of 8%.

Problem #3. Briefly describe the results of studies that examined the performance of alternative industries during specific time periods, and discuss their implications for industry analysis.

Problem #4. Briefly describe the results of the studies that examined industry performance over time. Do these results complicate or simplify industry analysis?

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