Answer ALL Questions
Question 1

  1. What role commissions undertake in the market efficiency test ? (4 marks)


  1. In a Maybank research report entitled “Capitalising Value and Growth Investment”, the report says that “excess returns from value equities is likely to follow a time period of below par performance, rendering early identification and purchase of value equities ineffective strategically.” Explain why early buying of value equities is ineffective strategically. (6 marks)

Question 2

  1. Comment on the following statement: In valuing a bond, it makes no difference in terms of the age of the security. All that matters is the length of the expiry period. (2 marks)


  1. Comment on the following statement: Possessing a callable bond is always a positive information because you enjoy capital gains from the bond retirement at par. (8 marks)

Question 3
Although stop orders are very useful, surveys show that very few individual investors use them. Why does this happen ? (2 marks