Suppose you are making an investment and it goes down. What is your natural response to this example? A. Generally, I don't fault myself?if an investment doesn't paintings out, this may actually be due to awful luck. I'll sell the inventory and flow on, in place of pursuing the details of what went incorrect. B. I would need to investigate and determine why my investment failed. In fact, I'm very inquisitive about locating out what went wrong. I positioned a variety of emphasis at the motives behind my investment deci- sions, so I need to be privy to the motives behind my investment's overall performance. Question three: Suppose you are investigating a money supervisor for in- clusion for your portfolio. Your marketing consultant shows a big-cap fee manager for you. What is your herbal technique to analyzing the supervisor's performance? [1:38 PM, 9/16/2021] vii: Let's start by means of reviewing the good judgment employed in the preceding diagnostic quiz. First, here are a few scoring and assessment suggestions, damaged down by way of question/object. Afterwards, we are able to talk a few standard tactics that can help to save you people from maintaining economic harm due to self-attribution bias. Question 1: Often, investors take a look at the song report of a mutual fund, see super performance over three or five years, and determine to invest. This may be a mistake if returns have been achieved with the aid of taking too much danger or in a unmarried approach. For instance, the Russell 2000 supervisor may have accomplished her returns with the aid of concentrating the portfolio in 15 names, and hit two grand slam domestic runs and picked four substantially losing investments. This could have been a case of success as opposed to skill, but the song record doesn't show that. Also, what was the annualized trendy deviation? If it turned into markedly higher than the index, that is a crimson flag. Investors need to cognizance not handiest on the final results but also the procedure. Question 2: Similarly, in Question 2, the rising markets supervisor may also have made a aware selection to keep away from a positive usa or a collection of nations that executed incredibly properly however all of sudden so. (By the manner, this is the case for indexing?you by no means need to worry about substrategies which you do now not own performing well because you own all of them.) Suppose your thesis now's that China and India will outperform and this manager is nicely positioned in these markets. You may additionally want to invest in spite of everything, even though this supervisor has underperformed. You need to appearance now not most effective at the final results, however additionally on the procedure that drove the outcome.

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Question 12 i. The spot exchange rate is $1.25/1, the Euro interest rate is 3.5%, the US interest rate is 6% and the time left to expiry of the December 2021 dollar per euro futures contract is 200 days. Based on a 365-day trading year what is an appropriate price for the December 2021 dollar per euro future exchange rate? Comment on whether the dollar is at a futures premium or discount. ii. The Dow Jones cash index is reading 30,600, the US risk free rate of interest is 6% and the dividend yield on the Dow Jones stocks is 2% per annum. Calculate an appropriate "fair value" for the December 2021 Dow Jones index futures contract assuming that the time left to expiration is 200 days based on a 365- trading year. Comment on whether the Dow Jones index futures contract is at a premium or discount to the cash market.