Note about the format of Discussions: The Discussions in this course are intended to generate a meaningful conversation among you and your classmates, such as what you would experience in a live classroom. As such, the prompts focus on specific issues related to the weekly topic and assigned readings. Your responses are expected to be fully conceived ideas supported by those Learning Materials and your own experiences or those in the current media/literature.
Post your answer to all the aspects of the discussion inquiry.
Answer the following questions:
On September 12 2007, Mr. Hugh “Nat” Wolff invested $10 million with an asset management firm. On July 26 2011 Mr. Wolff added $3 million dollars to that investment. There were no other cash infusions or withdrawals. Today, March 17 2017, the total value of Mr. Wolff’s investment at the asset management firm is $21 million. Do you have all the information you need to compute dollar-weighted and time-weighted returns? If you do not have all the information, what is missing?
Now consider how Mr. Wolff should evaluate the performance of the asset management firm he hired. What is the problem with just looking at the raw return obtained by the firm? Describe in detail what additional data would you need to calculate Sharpe Ratio or CAPM Alpha from scratch? How do you tell whether Sharpe Ratio or CAPM Alpha is a relatively more appropriate performance measure?
By Saturday, 11:59 p.m. ET:
Respond to at least two of the responses provided by your classmates with analysis, assessment, or observation. Please be sure to make an attempt to respond to different classmates each week and to respond to each classmate at least once by the end of the class. Feel free tp politely disagree from fellow students, and to revise your own opinion.
Click on the Reply button below to reveal the textbox for entering your message. Then click on the Submit button to post your message.
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