Why inflation is a concern to investor

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1- What are the differences between top-down and bottom-up approaches in asset allocation?

2- Why inflation is a concern to investor when investing in a country? (Hint: Discuss the effect on the currency and asset prices)

3- Based on the above road map, explain how NEM and ETP can be a boost to economic growth, and hence activate investment? (Hint: You can relate to the equation of C + I + G + X - M = Y in macroeconomics)

4- Assuming now you are using a top-down approach to come out with stock selection, recommend a stock or industry for investors based on your top-down analysis and the above road map.

5- If someone states that the Return on Investment (ROI) from investing in an asset is 100 per cent annually whereas the economy is growing at 3 per cent annually, will you invest your money in buying the asset?

The return on investment formula:

ROI = ( Gain from investment - investment cost) / investment cost

Reference no: EM13852856

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