Discuss the difference between monopolistic competition, monopoly and perfect competition.

Discuss at least three types of market structures Discuss the various measures of market power. Give examples of countries that would be classified as a monopoly. What about an oligopoly. What about monopolistic competition. Discuss the measures implemented by the government to deal with firms that abuse their market power. Discuss why some degree of monopoly power is permitted in an economy? What influence do consumers have on market structures? What influence do the producers have? What is the process used to solve a Cournot homogenous duopoly.(i) Describe how a risk model can be used to determine the level of overall risk within a portfolio. [3] (ii) Describe how risk budgeting makes use of a risk model for portfolio construction. [4] Risk Parity investment strategies have become popular in recent years. Risk Parity is an application of risk budgeting where a portfolio is constructed such that equal contributions to overall risk are targeted across each of the components of the portfolio, using leverage if required. (iii) Explain the potential disadvantages to an investor of applying a Risk Parity investment strategy. [5] A developed country has applied a substantial and comprehensive policy of Quantitative Easing (QE) over a period of several years. (iv) Sketch a diagram showing what a QE policy is and the impact it is likely to have on asset markets. [9] (v) Assess how the QE monetary policy might reduce or increase the impact of the disadvantages of a Risk Parity investment strategy. [2] A fund constructed using Risk Parity techniques makes significant use of leverage and its portfolio is constructed based on historic risk and correlations. (vi) (a) Explain how such a portfolio can be vulnerable to changing economic conditions. (b) Suggest enhancements to the fund's investment strategy that would improve its resilience to changing market conditions