Assuming flexible exchange rates, a decline in the world price of copper (a major Canadian export),

other sectors of the Canadian economy will ________ due to the ________ of the Canadian dollar.

A) expand; appreciation

B) contract; depreciation

C) expand; the reduced speculative appeal of

D) contract; appreciation

E) expand; depreciation

Discuss why market power is a source of market inefficiency. Discuss aliocative inefficiency, productive inefficiency and dynamic inefficiency associated with market power. Indicate two measures to evaluate the concentration in markets. For a pureiy competitive, P=MR=D. Is this true for a monopolist. Why or why not? Discuss which firm has the least control over price and why? Discuss why it is hard for a firm to maintain market power over long run. 7 (1) State a formula relating the rental yield of properties to the dividend yield on equities. Suggest an alternative formula appropriate for properties with low rental growth, stating any assumptions. [3] (ii) Explain the difference between portfolio-based indices and barometer indices for property investments. Comment on the suitability of each of these types of index for assessing the performance of a property portfolio. [3] [Total 6] 8 List the taxation factors which an individual will consider in selecting investments which maximise the after tax return. [6] 9 Outline the additional difficulties which face an analyst conducting fundamental investment analysis of a company based and operating in Latin America. [6] 10 A listed company has a long record of strong sales and profits growth relative to its competitors within an industry where the market has been steadily expanding. The company has recently reported results which show an unexpected decline in profits. The share price, which had been performing well in recent years, has fallen sharply. You are an investment analyst new to the sector. Explain in detail the investigations you would conduct and the comparative factors you would assess in carrying out an analysis of the prospects for the company and its relative attractiveness within the sector at the current share price. [11] 11 Economic growth has been strong for a number of years in a medium sized developed country. In order to curb inflation the central bank has raised short term interest rates substantially over the last few months. Describe how the economic situation may develop over the next two years and how this is likely to affect the level of bond and equity markets. [15]