Question 3 (25 marks) a) Explain how a given investor chooses an optimal portfolio. (5 marks) b) Under what circumstances would the APT be preferred over the CAPM as a tool for selecting stocks for the fund portfolio? (5 marks) c) Describe the problems in relation to the definition and estimation of the beta measure in the CAPM that would support the criticism of providing too simple a view of risk. (5 marks) d) Discuss the concept of the efficient market hypothesis (EMH) and each of its three forms. weak, semi-strong, and strong efficiency, (10 marks) Question 3 (25 marks) a) Explain how a given investor chooses an optimal portfolio. (5 marks) b) Under what circumstances would the APT be preferred over the CAPM as a tool for selecting stocks for the fund portfolio? (5 marks) c) Describe the problems in relation to the definition and estimation of the beta measure in the CAPM that would support the criticism of providing too simple a view of risk. (5 marks) d) Discuss the concept of the efficient market hypothesis (EMH) and each of its three forms. weak, semi-strong, and strong efficiency, (10 marks)