Distinguish between passive investment-management strategy and active investment-management strategy.

i. Miss Anita Appiah is a noted investor in the Ghanaian economy. Last year, she created a portfolio from the acquisition of under-priced stocks on the Ghana Stock Exchange. In the second quarter of this year, she cashed out her investment in two of the stocks in the portfolio and used the proceeds to acquire three other stocks that were under-priced at the time.

Required:

(a) Would you conclude that Miss Appiah used the top-down approach to portfolio creation? Explain.

(b) Is Miss Miss Appiah using the active or the passive investment management strategy? Explain.

(c) Based on the limited information provided above, would you conclude that the Ghanaian stock market is efficient? Explain.