QUESTION 6 (20 MARKS)

(a) Distinguish between active and passive portfolio management. (5 marks)

(b) Describe three strategies of active portfolio management. (9 marks)

(c)

Port folio	Return (%)	Std Dev (%)	(Beta)
A	40%	55%	0.8
B	30%	35%	1

Risk free rate of return is 18%.

Calculate for both portfolios:

(a) Sharpe Ratio. (3 marks)

(b) Treynor Ratio. (3 marks)