博迪_投资学第九版_英文答案(5)

博迪_投资学第九版_英文答案

15. With a “top-down” investing style, you focus on asset allocation or the broad

composition of the entire portfolio, which is the major determinant of overall

performance. Moreover, top-down management is the natural way to establish a

portfolio with a level of risk consistent with your risk tolerance. The disadvantage of an exclusive emphasis on top-down issues is that you may forfeit the potential

high returns that could result from identifying and concentrating in undervalued

securities or sectors of the market.

With a “bottom-up” investing style, you try to benefit from identifying undervalued securities. The disadvantage is that you tend to overlook the overall composition of your portfolio, which may result in a non-diversified portfolio or a portfolio with a risk level inconsistent with your level of risk tolerance. In addition, this technique tends to require more active management, thus generating more transaction costs. Finally, your analysis may be incorrect, in which case you will have fruitlessly expended effort and money attempting to beat a simple buy-and-hold strategy.

You should be skeptical. If the author actually knows how to achieve such returns, one must question why the author would then be so ready to sell the secret to others. Financial markets are very competitive; one of the implications of this fact is that riches do not come easily. High expected returns require bearing some risk, and

obvious bargains are few and far between. Odds are that the only one getting rich from the book is its author. 16.

17. Financial assets provide for a means to acquire real assets as well as an expansion

of these real assets. Financial assets provide a measure of liquidity to real assets

and allow for investors to more effectively reduce risk through diversification.

18. Allowing traders to share in the profits increases the traders’ willingness to

assume risk. Traders will share in the upside potential directly but only in the

downside indirectly (poor performance = potential job loss). Shareholders, by

contrast, are affected directly by both the upside and downside potential of risk.

19. Answers may vary, however, students should touch on the following: increased

transparency, regulations to promote capital adequacy by increasing the frequency of gain or loss settlement, incentives to discourage excessive risk taking, and the

promotion of more accurate and unbiased risk assessment.