Q1) Concept of optimal portfolio is supposing that investors are trying to minimize risk aggressively whereas looking for highest return possible. What influencers could affect the investors accepted level of risk? Is it good to be aggressive while young and more risk adverse when older? Between technical analysis and fundamental analysis, do you think that the investors should combine the both styles for better performance?

Q2) Describe the various macroeconomic factors which determine exchange rates? What is the justification for existence of International Fisher Effect? If you didn’t wish high-priced or heavily capitalized firm (one with high total market value) to overly influence your index, which of weighting systems described in this chapter would you be likely to use?

Q3) Cash effects of decreasing accounts payable turnover are unlimited. Positive operating cash flow can’t be generated when earnings are negative. Do you agree or disagree with these statements? Briefly describe.