Finance - Portfolio Management

Q.1 (a).What is the relationship between Yield Curve and Fiscal and Monetary Policies ?

Q.1 (b). Describe the relationship between Inflation and Business Cycle.

Q.2.Explain the different sources of excess return in international bond portfolios 

Q.3.Given the following information, calculate the short-term interest rate target.

Neutral rate 4% 

Inflation target 3%

Expected inflation 7% 

GDP long-term trend 2% 

Expected GDP growth 0%

Q.4.Given the following information, calculate the Sharpe Ratio. (2 Marks)

Return of Portfolio 30

Risk-free Return 10

Standard –deviation of portfolio’s excess return 15

Answers