User Account

All Pages

Calculate the expected return and standard deviation

Assignment Help Financial Management
Reference no: EM132092780

Assessment purpose

The assignment is designed to enhance students' skills in analysing the implication of the time value of money as well as facilitating students' discussion of the role of large diversified banks.

Part A: Risk and Return for Portfolios

You are given the following data on several shares:

State of the
Economy

Probability

Returns in Each State of the Economy

Gere Mining

Reubenfeld Films

DeLorean Automotive

Boom

25%

 40%

247n

-20%

Expansion

50%

12%

10%

 12%

Recession

25%

-20%

-12%

 40%

a) Calculate the expected return and standard deviation for each share.

b) Calculate the expected return and standard deviation for a portfolio invested equally in Gere Mining and Reubenfeld Films. How does the standard deviation of this portfolio compare to a simple 50-50 weighted average of the standard deviations of the two shares?

c) Calculate the expected return and standard deviation for a portfolio invested equally in Gere Mining and Delorean Automotive. How does the standard deviation of this portfolio compare to a simple 50-50 weighted average of the standard deviations of the two shares?

d) Explain why your answers regarding the portfolio standard deviations are so different in parts b and c.

Part B: Essay  - 1,000 words

What is meant by an agency cost or agency problem? Do these interfere with maximizing shareholder wealth? Why or why not? What mechanisms minimise the cost of agency cost?

Assessment Criteria:

- Demonstrated knowledge of the agency problem and shareholder wealth maximization.
- Logical inferences drawn from information presented and appropriate justification of stance taken.
- Overall presentation of the argument is relevant and appropriate.

Reference no: EM132092780

Questions Cloud

Where do we find law in america : Where do we find law in America? What are the main sources of law and how are they created?
Equality between men and women been achieved : Given the changes in the law during the last 134 years and other social changes, has equality between men and women been achieved by our legal system?
Review most recent financial statements of australian firm : BAO2202 Financial Accounting Assignment - Review the most recent financial statements of two Australian firms from different industries
Reliable information in the past : If the information came from a confidential informant who had provided reliable information in the past? Why or why not?
Calculate the expected return and standard deviation : FINM202 - Financial Management - Calculate the expected return and standard deviation for each share - Calculate the expected return and standard deviation
Party to respond to interrogatories : What steps can be taken to force a party to respond to interrogatories?
Patientconsent before sharing information : Should health systems, community agencies, and social service providers receive patientconsent before sharing information and discussing people's medical
Create a domain model class diagram for the rmo csms : Create a domain model class diagram for the RMO CSMS marketing subsystem. Note: The graphically depicted solution is not included in the required page length.
What is the comparison between aguilar two-prong test : What is the comparison between Aguilar two-prong test with the Illinois v. Gates decision? Please also explain how each are used.

Reviews

Write a Review

Financial Management Questions & Answers

  Foreign company acquisition

Acquisition by a foreign company and the effects of that decision and the results of foreign exchange in Euro and the exchange rate differences.

  Financial management for profit and non profit organizations

In this essay, we are going to discuss the issues of financial management in a non-profit organisation.

  Method for estimating a venture''s value

Evaluate venture's present value, cash and surplus cash and basic venture capital.

  Replacement analysis

This document show the Replacement Analysis of modling machine. Is replacement give profit to company or not?

  Business finance task - capital budgeting

Your company is considering using the payback period for capital-budgeting. Discuss the advantages and disadvantages of this technique.

  Analysis of the investment

In this project, you will focus on one of these: the additional cost resulting from the purchase of an apple press (a piece of equipment required to manufacture apple juice).

  Conduct a what-if analysis

Review the readings and media for this unit, including the Anthony's Orchard case study media. Familiarise yourself with the Anthony's Orchard company and its current situation.

  Determine operational expenditures

Organisations' behaviour is guided by financial data. In the short term, such data will help determine operational expenditures; in the long term, historical data may help generate forecasts aimed at determining strategic plans. In both instances.

  Personal financial management

How much will you have left over each half year if you adopt the latter course of action?

  Sources of finance for expansion into new foreign markets

A quoted company is considering several long-term sources of finance for expansion into new foreign markets.

  Long term financial planning

This assignment is designed for analyze Long term financial planning begins with the sales forecast and the key input in the long term fincial planning.

  Explain the role of fincial manager

This assignment explain the role of fincial manager, function of manger. And what are the motives of financial manager.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd