4. Answer the following questions on asset allocation, portfolio construction and behaviour finance:

a) Discuss the concept of an efficient portfolio

b) What is meant by the term correlation? Provide an example to assist with your discussion

c) If an investment has a beta of 1.2 and the market increases by 5% how would you expect this investment to behave?

d) Discuss the efficient market hypothesis and the various forms of market efficiency.

e) Outline and discuss using examples the difference between active and passive investment management

(short answers required only)