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FINC2011 Corporate Finance

Question

Answered

You are starting an internshipatalargeinvestment fundcalled “WhiteRock”. Your manager has tasked you towrite a reportfor a clientthat compares the potential return and risk profilesof different investmentopportunities.Given the uncertainty with current financial markets, this client is considering investingonly for themedium term (approximately 5 years).The investment fund isthinkingwhethera well-diversified or limited diversification strategy would be preferablefor this client. You expect that extra returns could be generated as compensation for bearing more risk.

Required:

1.Select two stocks and an appropriate market indexfrom the Australian Securities Exchange (ASX), London Stock Exchange (LSE) or New York Stock Exchange (NYSE). The two stocks will form thelimited diversification portfolioand the market index will be the diversifiedportfolio. Justify why these two stocks are appropriate choices to combine together andyourchoice of a relevant market index.

2.Estimate and compare the returns and standard deviationof each stock and the market index over an appropriate time period. Justify your data choices.

3.Calculatethe beta of eachof the twostocks.Justify your data choices.

4.Calculate the expected return of each stock using the Capital Asset Pricing Model (CAPM).Justify your data choices.

5.Construct a series oflimited diversificationportfolioswiththe twochosenstocks by varying the weights of eachat 2.5% increments–starting at 100% invested in Stock X and then increasing the weight of Stock Y until it reaches 100%. Calculate the expected return and beta of each portfolio. The results should be presentedon an appropriate graph.6.Provide a final recommendation tothis clienton the most appropriatechoice(s)that they should invest in and how it could be implementedmostoptimally.

FINC2011 Corporate Finance

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The Mortgage Against the Primary

The super guarantee rate is 9.5%. This is discounted on from the gross salary of each of them. James ha s 9 years to retirement while Gina has 11. The living expenses are discounted for 11 years with a growth rate of 6% per year. Date of birth for Jam es;01/07/1979 Date ...

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FNCE100 Corporate Finance

Task: Shen Due Date: 10/17/2021 Project:  Select three publicly traded companies for investment purposes. Then, you will use financial ratios (Ex: Current ratio, P/E ratio, etc.) from your textbook to analyze your chosen companies.   Your analysis will include a spreadsheets of three r ...

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Design and Model System

1 IMSE 421 Homework 1(100 points) Name: Case Study -The British aviation industry introduced the Bristol Brabazon airliner in the 1950s. The Brabazon was technologically advanced, very luxurious, and the largest airliner at the time. The British government funded the development of the Brabazon, ...

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Superannuation Balance

1 Final Assessment _HS1_ FIN60010 Total marks: 100 Student name: Student ID: Assessment instructions: 1. Answer all the requirements of the assessment . 2. Upload only one document in word doc or PDF to submit your assignment . 3. You may use any Application to conduct analysis . 4. You ...

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