‘ Questions 1. (750 words) Explain the arbitrage. Assumptions of arbitrage.
Question 2. (450 words) Explain exchange rate risk, transaction, translation and economic risk. Potential exchange risk that affects the portfolio. Exchange rate volatility of £1$,E1€,E1Yen.
Question 3. (450 words) Explain market risk. Volatility of market risk on (FTSE-100, Nasdaq, dax, nikkei) How exchange rate will affect on the FTSE-100 return? How market risk will affect on the portfolio?
Question 4. (250 words) Explain fama French factor.