1.Discuss market efficiency; for example, Is it possible for a portfolio manager to beat the market? Discuss why/why not. Include in your discussion the terms active and passive management. Focus on equities.

In addition, how do analysts attempt to identify mispriced securities? Be specific

2.Describe the Dow theory and discuss the trend of the current market:

3.Discuss the choices to be made in an actively managed bond portfolio:

4.Given the writer of a straddle with the following information:

Sell 5 IBM 120 August calls @4

Sell 5 IBM 120 August puts @3

1. Calculate the B.E points:
2. What is the strike price? _____________
3. What is the total premium paid by holder of the long position ____________
4. What is the maximum amount that the investor in the short position can make? _________
5. Which organization serves to facilitate the trading of options?
6. Why are straddles used as an investment tool?
7. What are the key risks when an investor decides to invest in options?

explain and answer