1, The following is NOT a growth investment

a,A consumer staple firm during an economic downturn.

b,A firm has fallen in value because its product is facing strong competition from a lower cost producer and the competing product has better features as well.

c,A solar panel firm that has made 16% more efficient solar panels.

d,A firm that is planning to replace its production workers with robots.

e, A pharmaceutical firm that has discovered a vaccine for a virus.

2,Which of the following statements is correct regarding Static Capital Market Assumptions (CMAs) regarding future expectation for each asset class?

a,Static CMA of future expected returns can use historical returns adjusted for future market conditions

b,Static CMAs are essentially dynamic CMAs when considered in real terms

c,Historical volatility is a good measure of future expected volatility

d,Historical returns are good forecast of future returns

e,Historical correlation is a good estimate of future correlation

3, Which of the following statement regarding Value and Growth investments is incorrect?

a, Value investment strategy is designed to beat the market

b, Value investments are in large capitalised firms that perform well during market downturns.

c, Growth investments can do well during both, economic expansion and economic contraction.

d, Value and Growth investment strategies are examples of active investment strategies.

e, Value and Growth investments strategies are not limited to any specific capitalisation.

4, If the CMAs for equities overestimate expected returns and underestimate expected volatility and correlation with other assets , the resulting asset allocation will

a, provide higher real growth of portfolio

b. be conservative and will underperform

c, be riskier than required by investor

d, perform better than expected and hence deliver better returns with lower risk

e, be appropriate to achieve investment objectives