Which ONE of the following describes the Mandatory Provident Funds Scheme?

What does duration measure?

Which of the following statements are CORRECT regarding the normal distribution of a company’s returns?

1. There is a 68% probability that the company’s actual return is within 1 standard deviation of the expected return
2. There is a 95% probability that the company’s actual return is within 2.5 standard deviations of the expected return
3. Standard deviation does not differentiate upside potential from the downside risk of an investment
4. The lower the standard deviation of a company’s returns, the tighter the cluster of returns around the mean

What is the beta for a portfolio that replicates the Hang Seng Index (held in the same proportions as the market) with no risk-free securities?

The study of behavioural finance has contributed to investment management strategies through the empirical results of cognitive and social psychological studies.  Which ONE of the following is an investment strategy arising from such studies?

Ronnie Return has obtained the following performance information regarding four fund managers.  The current risk-free rate is 3%.

                                    Return   Std Dev   Beta
Market portfolio         0.113     0.66    
Fund manager A         0.113     0.23       1.80
Fund manager B         0.148     0.94       0.51
Fund manager C         0.158     0.56       0.89
Fund manager D         0.092     0.44       0.45

Which fund manager’s performance lies on the Capital Market Line?