Both the APT and the CAPM imply a positive relationship between expected return and risk. The APT views risk

(b) (i) Discuss the relationship between the concepts of ‘business risk’ and ‘financial statement risk’; and

(4 marks)

The security market line depicts______.

A．a security's expected return as a function of its systematic risk

B．the market portfolio as the optimal portfolio of risky securities

C．the relationship between a security's return and the return on an index

D．the complete portfolio as a combination of the market portfolio and the risk-free asset

Some people think of life as a game. There are similarities between life and games: both can be played, both have rules, and both turn out winners and losers. There are differences __56__ the two, however. Games make you __57__ away from life; the more you play, the less you pay __58__ to the more important things in life. In life, you get only one chance to play. When your life is over, the game is over. Life is not a game. Life is the __59__ thing. Life is unpredictable （不能预测的） ; you can play it right and still __60__.Life is not always fair; one wrong move or one bad choice may __61__ too many such moves or choices in life. Take a chance with your life and it could be the last chance you get. Life isn&39;t always fun, but it can be if you decide to make it that __62__.

__63__, the advice is "Enjoy your life; take risks, but don&39;t engage __64__ risky behavior." Think __65__ the things you do and the things you shouldn&39;t do. Don ’t play with you r life in the following points. Don&39;t play with your safety. Don&39;t ignore proven safety measures.

Safety measures and safety equipment have one purpose: to __66__ you safe. _67__ your seat belt when you drive a car; wear a helmet（头盔）when you __68__ a motorcycle. Your safety is in your __69__. Don&39;t play with money.

You can make your money _70__ or you can throw it all away. Don&39;t pay with a credit card if you don&39;t have the money to pay __71__ the bill when it comes. Save some of your money. Think twice before __72__ a purchase, no matter how __73__ it is. Skip (省去) the cup of coffee or the can of soda each day, and save the money you would have spent. In just a few years, you will have saved thousands of dollars. Save more, and you&39;ll have more. The habits you __74__ today will affect you financially for the rest of your life. Learn how to __75__ your money.

56___________

A.beyond

B.besides

C.between

D.among

57A.engage

B.turn

C.change

D.think

58A.attention

B.resistance

C.importance

D.vacation

59A.proud

B.short

C.false

D.real

60A.lose

B.succeed

C.pass

D.earn

61A.awake

B.permit

C.cause

D.arise

62A.energy

B.trip

C.hope

D.way

63A.Besides

B.Thus

C.Also

D.But

64A.at

B.out

C.in

D.to

65A.about

B.with

C.beside

D.down

66A.turn

B.keep

C.gain

D.reach

67A.fasten

B.prevent

C.pretest

D.resist

68A.get

B.sit

C.move

D.ride

69A.gloves

B.areas

C.hands

D.sights

70A.intend

B.shorten

C.grasp

D.grow

71A.at

B.for

C.with

D.out

72A.make

B.take

C.making

D.taking

73A.small

B.short

C.high

D.big

74A.develop

B.extend

C.Instruct(ion)

D.offend

75A.promote

B.manage

C.consider

D.overlook

请帮忙给出每个问题的正确答案和分析，谢谢！

A、The expected return is 0.09 and standard deviation is 0.265

B、The expected return is 0.075 and standard deviation is 0.288

C、The expected return is 0.12 and standard deviation is 0.225

D、The expected return is 0.12 and standard deviation is 0.265

A、The expected return is 0.09 and standard deviation is 0.265

B、The expected return is 0.075 and standard deviation is 0.288

C、The expected return is 0.12 and standard deviation is 0.225

D、The expected return is 0.09 and standard deviation is 0.275

Dr Thomas Starzl, like all the pioneers of organ transplantation, had to learn to live with failure. When he performed the world's first liver transplant 25 years ago, the patient, a three-year-old boy, died on the operating table. The next four patients didn't live long enough to get out of the hospital. But more determined than discouraged, Starzl and his colleagues went back to their lab at the University of Colorado Medical School.

They devised techniques to reduce the heavy bleeding during surgery, and they worked on better ways to pre- vent the recipient's immune system from rejecting the organ — an ever-present risk.

But the triumphs of the transplant surgeons have created yet another tragic problem: a severe shortage of donor organs. "As the results get better, more people go on the waiting lists and there's wider disparity between supply and need," says one doctor. The American Council on Transplantation estimated that on any given day 15 000 Americans are waiting for organs. There is no shortage of actual organs; each year about 5 000 healthy people die unexpectedly in the United States, usually in accidents. The problem is that fewer than 20 percent become donors.

This trend persists despite laws designed to encourage organ recycling. Under the federal Uniform. Anatomical Gift Act, a person can authorize the use of his organs after death by signing a statement. Legally, the next of kin can veto these posthumous gifts, but surveys indicate that 70 to 80 percent of the public would not interfere with a family member's decision. The biggest roadblock, according to some experts, is that physicians don't ask for donations, either because they fear offending grieving survivors or because they still regard some transplant procedures as experimental.

When there aren't enough organs to go around, distributing the available ones becomes a matter of deciding who will live and who will die. Once donors and potential recipients have been matched for body size and blood type, the sickest patients customarily go to the top of the local waiting list. Beyond the seriousness of the patients' condition, doctors base their choice on such criteria as the length of time the patient has been waiting, how long it will take to obtain an organ and whether the transplant team can gear up in time.

Which of the following is true according to the text?

A．All the patients whom Dr Starzl operated on died on the operating table.

B．To Dr Starzl it was very discouraging that his first liver transplant failed.

C．Many doctors had performed organ transplant before Dr Starzl.

D．Dr Starzl didn't give up even though he had failed in his attempts.

According to the text, which of the following is TRUE?

A．Gissen had no relationship with risk over last decade.

B．In both scenarios, the challenge achieves the right balance.

C．There is no good way to look at portfolio.

D．The risk does no good to portfolio.

Monica Lewis, CFA, has been hired to review data on a series of forward contracts for a major client. The client has asked for an analysis of a contract with each of the following characteristics:

A forward contract on a U.S. Treasury bond

A forward rate agreement (FRA)

A forward contract on a currency

Information related to a forward contract on a U.S. Treasury bond: The Treasury bond carries a 6 percent coupon and has a current spot price of $1,071.77 (including accrued interest). A coupon has just been paid and the next coupon is expected in 183 days. The annual risk-free rate is 5 percent. The forward contract will mature in 195 days.

Information related to a forward rate agreement: The relevant contract is a 3 x 9 FRA. The current annualized 90-day money market rate is 3.5 percent and the 270-day rate is 4.5 percent. Based on the best available forecast, the 180-day rate at the expiration of the contract is expected to be 4.2 percent.

Information related to a forward contract on a currency: The risk-free rate in the U.S. is 5 percent and 4 percent in Switzerland. The current spot exchange rate is $0.8611 per Swiss France (SFr). The forward contract will mature in 200 days.

Part 5)

Based on the information given and assuming a notional principal of $10 million, what value should Lewis place on the 3 x 9 FRA at time of settlement?

A)$38,000 paid from short to long.

B)$19,000 paid from long to short.

C)$37,218 paid from long to short.

D)$19,000 paid from short to long.

Monica Lewis, CFA, has been hired to review data on a series of forward contracts for a major client. The client has asked for an analysis of a contract with each of the following characteristics:

A forward contract on a U.S. Treasury bond

A forward rate agreement (FRA)

A forward contract on a currency

Information related to a forward contract on a U.S. Treasury bond: The Treasury bond carries a 6 percent coupon and has a current spot price of $1,071.77 (including accrued interest). A coupon has just been paid and the next coupon is expected in 183 days. The annual risk-free rate is 5 percent. The forward contract will mature in 195 days.

Information related to a forward rate agreement: The relevant contract is a 3 x 9 FRA. The current annualized 90-day money market rate is 3.5 percent and the 270-day rate is 4.5 percent. Based on the best available forecast, the 180-day rate at the expiration of the contract is expected to be 4.2 percent.

Information related to a forward contract on a currency: The risk-free rate in the U.S. is 5 percent and 4 percent in Switzerland. The current spot exchange rate is $0.8611 per Swiss France (SFr). The forward contract will mature in 200 days.

Part 4)

Based on the information given, what initial price should Lewis recommend for the 3 x 9 FRA?

A)4.96%.

B)4.66%.

C)5.96%.

D)5.66%.

GENETICALLY MODIFIED FOODS

Are genetically modified crops an environmental dream come-true or a disaster in the making? Scientists are looking for answers.

The world seems increasingly divided into those who favor genetically modified(GM) foods and those who fear them Advocates assert that growing genetically altered crops can be kinder to the environment and that eating foods from those plants is perfectly safe. And, they say genetic engineering which can induce plants to grow in poor soils or to produce more nutritious foods will soon become an essential tool for helping to feed the world's burgeoning population. Skeptics contend that GM crops could pose unique risks to the environment and to health risks too troubling to accept placidly, Taking that view, many European countries are restricting the planting and importation of GM agricultural products. Much of the debate hinges on perceptions of safety. But what exactly does recent scientific research say about the hazards? The answers, too often lost in reports on the controversy, are served up in the pages that follow.

Two years ago in Edinburgh, Scotland, eco-vandals stormed a field, crushing canola plants. Last year in Maine, midnight raiders hacked down more than 3000 experimental poplar trees. And in Sun Diego, protesters smashed sorghum and sprayed paint over greenhouse walls.

This far-flung outrage took aim at genetically modified crops. But the protests backfired: all the destroyed plants were conventionally bred. In each case, activists mistook ordinary plants for GM varieties.

It's easy to understand why. In a way, GM crops—now on some 109 million acres of farmland worldwide—are invisible. You can't see, taste or touch a gene inserted into a plant or sense its effects on the environment. You can't tell, just by looking, whether pollen containing a foreign gene can poison butterflies or fertilize plants miles away. That invisibility is precisely what worries people. How, exactly, will GM crops affect the environment—and when will we notice?

Advocates of GM, or transgenic, crops say the plants will benefit the environment by requiting fewer toxic pesticides than conventional crops. But critics fear the potential risks and wonder how big the benefits really are. "We have so many questions about these plants," remarks Guenther Stotzky, a soil microbiologist at New York University. "There's a lot we don't know and need to find out."

As GM crops multiply in the landscape, unprecedented numbers of researchers have started fanning into the fields to get the missing information. Some of their recent findings are reassuring; others suggest a need for vigilance.

Fewer Poisons in the Soil?

Every year U.S. growers shower crops with an estimated 971 million pounds of pesticides, mostly to kill insects, weeds and fungi. But pesticide residues linger on crops and the surrounding soil, leaching into groundwater, running into streams and getting gobbled up by wildlife. The constant chemical trickle is an old worry for environmentalists.

In the mid-1990s agribusinesses began advertising GM seeds that promised to reduce a farmer's use of toxic pesticides. Today most GM crops-mainly soybean, com, cotton and canola-contain genes enabling them to either resist insect pests or tolerate weed-killing herbicides. The insect-resistant varieties make their own insecticide, a property meant to reduce the need for chemical sprays. The herbicidetolerant types survive when exposed to broad-spectrum weed killers, potentially allowing farmers to forgo more poisonous chemicals that target specific weed species. Farmers to limit the use of more hazardous pesticides when they can, but GM crops also hold appeal because they simplify operations (reducing the frequency and complexity of pesticide applications) and, in some cases, increase yields.

&

A．Y

B．N

C．NG