Question 1 You have cash, RM100,000 and would like to invest on either a long-, medium-, or short-term basis. You are considering the following alternatives are: Alternative 1: Money market instruments These are safe investments, occurring at (typically) insured financial institutions or issued by the Malaysian government. These instruments offer the ultimate in liquidity, which can be defined as the ease with which an asset can be converted to cash very quickly and with little or no loss in value. The instruments traded in money market are treasury bills, commercial papers and other nonmarketable financial assets, namely savings account or fixed deposits, offered by financial institutions, for examples, Public bank, Maybank, CIMB and so forth. Alternative 2: Stock market securities As residual owners, holders of common stock have no guarantee that they will ever receive any current income or capital gain on their investment. The challenge is. That's not an easy task to find stocks that will provide the kind of return you are looking for as there are approximately a thousand of traded stocks in Bursa Malaysia. Given the above scenario, you are required to answer the following questions based on this module content outline: (c) Based on Question (b), recommend the alternative you feel the best. Explain. (6 marks) (d) Stock prices may move away from fair value randomly. Since you are well noted on the impacts of COVID-19 pandemic in Malaysia has stopped most investors from looking for market inefficiencies, you are now constantly seeking out ways of beating the market before the stocks are fairly priced again. Based on this module content outline and given this information, explain and show clearly using examples on how you could profit by investing in the Malaysian stock market in such circumstances. (12 marks) Question 1 You have cash, RM100,000 and would like to invest on either a long-, medium-, or short-term basis. You are considering the following alternatives are: Alternative 1: Money market instruments These are safe investments, occurring at (typically) insured financial institutions or issued by the Malaysian government. These instruments offer the ultimate in liquidity, which can be defined as the ease with which an asset can be converted to cash very quickly and with little or no loss in value. The instruments traded in money market are treasury bills, commercial papers and other nonmarketable financial assets, namely savings account or fixed deposits, offered by financial institutions, for examples, Public bank, Maybank, CIMB and so forth. Alternative 2: Stock market securities As residual owners, holders of common stock have no guarantee that they will ever receive any current income or capital gain on their investment. The challenge is. That's not an easy task to find stocks that will provide the kind of return you are looking for as there are approximately a thousand of traded stocks in Bursa Malaysia. Given the above scenario, you are required to answer the following questions based on this module content outline: (c) Based on Question (b), recommend the alternative you feel the best. Explain. (6 marks) (d) Stock prices may move away from fair value randomly. Since you are well noted on the impacts of COVID-19 pandemic in Malaysia has stopped most investors from looking for market inefficiencies, you are now constantly seeking out ways of beating the market before the stocks are fairly priced again. Based on this module content outline and given this information, explain and show clearly using examples on how you could profit by investing in the Malaysian stock market in such circumstances. (12 marks)
