1) As of the 28th of January, 2022, Apple Inc. (APPL) 's Beta is 1.20 (Calculated with 5-year Monthly Data). Please explain how to calculate Beta, what this number means, and how it is linked to CAPM using the Security Market Line. (20%)

2) Explain the Capital Asset Pricing Model (CAPM) and discuss its limitations. State reasons why the model has been important in investment decision making, despite such limitations. You are also required to provide definition and explanation of at least three alternative investment performance measurement approaches derived from the CAPM and discuss how those successors are differentiated from the predecessor. (30%)

Part B (50%)

Investment management companies often claim that their active funds can beat the market. This is possible, so the story goes, because such companies employ managers who find mispriced assets, who anticipate market movements, and who can generate returns from assets that others could not. There are hundreds of academic and professional studies that try their best to test the claim that actively managed funds can outperform the market.

1) Discuss critically the challenges that performance evaluation studies face. (25%)

2) What additional challenges exist for the performance evaluation of fund vehicles that invest in private market assets? (25%)