Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Diversification analysis
1. You are required to randomly select listed Australian firms and collect their stock price data from Use Yahoo! Finance.You are asked to give advice for your clients regarding how many stocks are required to have a diversified portfolio in Australian stock market. Using the datafrom Jan 2000 to Dec 2015, you construct equally weighted portfolios which consist of 1, 5, 10, 20, and up to a certain number of randomly chosen stocks to show the diversification effect. You need to show this diversification effect graphically.
2. Plot a market portfolio in the above figure that you created. Give some comments whether your portfolios are fully diversified.
3. We select different data span, from Aug 2007 to Dec 2010, construct portfolios that have same stock holdings as in the above question. The new data period can be viewed as the recent financial crisis period. Plot the risk of portfolios against the number of stocks included as in the above question. Interpret your observation and give potential reasons for the change in the graph if there is any.
4. The principle that marginal costs should be compared to marginal benefits in determining the optimal levels of production or consumption is fundamental to economic theory. The fact that "almost all" of the portfolio's unsystematic risk is eliminated when it contains 10 or 100 stocks is meaningless when presented by itself. Discuss how we can analyse this marginal benefit/cost relation in diversification.
klose outfitters inc. believes that its optimal capital structure consists of 60 common equity and 40 debt and its tax
What benefits are gained from research, planning, and the analysis of financial statements? Include sources and citing in APA format for each response.
What is the minimum line of credit that CBM will need?
for the cash flows in the previous problem suppose the firm uses the npv decision rule. at a required return of 11
Briefly explain what the consequences of such misevaluations might be. If appropriate, offer any thoughts on possible remedies.
The firm's marginal tax rate is 40 percent, and the project's cost of capital is 14 percent. What is the total value of the terminal year non-operating cash flows at the end of Year 3? Round it to a whole dollar, and do not include the $ sign.
A highly risk-averse investor is considering adding one additional stock to a 3-stock portfolio, to form a 4-stock portfolio. The three stocks currently held all have b = 1.0 and a perfect positive correlation with the market.
Project A and Project B will both cost $10,000. Project A returns $3,000 a year for 7 years. Project B returns $5,000 a year for 2 years. Using the payback period explain which project should be selected?
NWC requirements at the beginning of each yearis approximately 20% of the projected sales during the coming year. Thetax rate is 40% and the required returnon the project is 13%.
Explain why mutual funds are attractive to small investors? How can mutual funds generate returns to their shareholders?
Calculate the arithmetic average return on these stocks over the sample period. Which stock has greater dispersion around the mean?
The firm does not pay any dividends. Sales are expected to increase by 3.5 percent next year. If all assets, short-term liabilities, and costs vary directly with sales, how much additional equity financing is required for next year?
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd