High-Quality Portfolio Management Answers

The statement is false. This is because the CAPM model helps identify the risk and the corresponding return from the asset investment. Moreover, it assesses assets as well as their security and risk conditions having a return on the investment and enables an individual invest. The provided statement gives false evidence as there is a required risk premium on the security or the investment which bears the systematic risk. Volatile securities do...

Overview of Option Pricing ModelsInvestors should have a comprehensive knowledge about various variables which are essential for determining the price of an option. There are several methods of option pricing which use parameters like volatility, price of the underlying, risk free rate and time to expiration to arrive at a theoretical fair value of options. The most commonly used option pricing model is the Black-Scholes option pricing model w...

Current Investment Portfolio EvaluationThe purpose of the report is to advice Mr. Sharp, a client for the firm regarding the current investment portfolio and the proposed changes to the current asset allocation of the client based in the financial and economic scenarios. The report commences with the evaluation and analysis of the current constituent securities of the client’s portfolio representing the 3-year and 1-year returns earned b...

General Concepts regarding Project Portfolio Management (PPM)The term project management refers to a technique undertaken by managers of the project firm to guide a better course of working while engaging in a business environment. The stated technique helps managers of the firm to undergo several operational tasks keeping in mind market uncertainties and complex environment due to existence of internal and external forces affecting operations...

Value and Growth Stocks: Accounting MetricsRisk-averse investors choose growth companies, which are high-risk but potentially higher-returning investments. All of those are stocks of firms that have the potential to develop rapidly and continuously in the foreseeable future (Calandro 2016). Value shares are preferred by long-term investors who are willing to take on less risk and they are limited in quantity and provide long-term investment re...

What are Hedge Funds?A hedge fund is a type of private placement investment that is managed by investment management firms and is made up of sophisticated or institutional investors. The fundamental reason why various individuals participate in hedge funds is to protect themselves from losses in other assets. Managers of investment pools employ a variety of tactics, including leverage and esoteric asset trading, in an attempt to outperform the...

BackgroundThe researchers in the article “Rethinking Stock Returns” defines as the growth and value stocks in terms of book value to market value ratio. The researchers state that the stocks having high ratio of book value to market value fall under the category of value stocks and the stocks which have low ratio of book value to market value fall under the category of growth stocks. Fama and French, the researchers, found that it ...

Innovations Related at Apple Inc.In the current world, there underlies a very competitive and advanced society where the ability to dictate changes adds the utmost value. Increasing competitive advantage in innovation management and creativity is essential to this capability. For this reason, big companies with an effective management team are initiating top priority to design ways and mechanisms for enhanced innovations and creativity. Razavi...

Overall Return and Demand for Zero-Coupon Bond Expected return = ((FV / Current Price) -1 ) * 100 Expected return = ((1000 / 800) -1 ) * 100 Expected return = (1.25 -1 ) * 100 Expected return = 0.25 * 100 Expected return = 25% The above table mainly depicts the overall return, which is been provided by zero-coupon bond whose market price is $800. In addition, the face value of the bond is $1000, whereas market price is $8...

Portfolio Management ModelsProduct portfolio management is powerful decision process that involves constantly updating and revising a variety of new products and expansion projects. In an organization, it is stirred by the availability of various challenges in the market (Foxall, 2014). Available resources and the product cycle stage of the product determine the portfolio management process (Jugend, 2016). In the process, new product...

1. Organisational ContextThe strategic development and planning is a critical factor for the development of the organization and formation of an effective and smart system of operations (Adewole, Odunjo and Misra 2015, 1-5). The implementation of the strategic planning and functional development can be enhanced and further motivated using business management concepts and functions. The smart operations in the business organizations are conclud...

Situational Context and EvaluationProject portfolio management helps organizations both large and small to break down its project’s resources, its budgets, and targets into manageable elements. This paper will look at the strategies, processes, and deployment of an efficient and easily adaptable project management portfolio in Coca-Cola Company.  Portfolio management helps in improving the multi-level projects of Coca-Cola Company, ...

Question 1 a) Benchmark index is a group of stocks/securities which are used as benchmarks to compare the performance of stocks. These are also called the market index. The benchmark index for certain countries is given below: Country Benchmark Index Australia ASX 200 USA Dow Jones Hong Kong Hang Seng Japan Nikkei Index England FTSE 100 China S...

Importance of ITSM for NNITClearness, standardization and the scalability appears to be the most crucial part of any firm processing to the essential development. It was the literature for the NNIT at the time when the user, utility, and technology were added to the trade. Primarily, NNIT implemented the utility collection to give a synopsis of every utility offered like the supremacy structure for emphasizing obvious possession in the firm. A...

Reflective Portfolio and Its Purpose The room division management is an integral part in the hotel industry. As it is a known fact that hotel industry is a very big industry being full of risks, there are no doubts that this industry has many responsibilities towards its customers. The customers are the main responsibilities for the hotel managers and the different sections of the operations management. Hotel room division management is also s...

Question 11.a) A portfolio of strong diversification can be attained when the investment is done in less than positively correlated investments. This is due to the fact that when the asset is added to the portfolio it will create opportunities where the change in one variable will bring change in another variable. Thereby, the total risk will be reduced and an opportunity of enhanced return will occur. Both the assets and the portfol...

Application of MethodsReturn on any investment can be referred as the reward, provided to the investors, for bearing the risk of the investment. Amongst all the investment alternatives, stock prices are the most volatile in nature and therefore, the risk on investment in stocks is higher in comparison to other investment alternatives. On the other hand, due to the higher risk, the investors use to get higher returns on the stock investments. H...

Yield to Maturity (YTM)1. a) Yield to maturity is the rate that is used to discount the future cash flows associated with the bond. Typically it is the return earned by the bondholder for purchasing and holding the bonds till their maturity. This rate equates the present value of the cash flows related to bond with their current market price. YTM is also referred as internal rate of return or the market interest rate (Stack Exchange, 2018). Par...

Task 1Westpac was established in 1817 and there are more than 35,200 employees who are assisting more than 12 Million customers in Australia, New Zealand and also in the Asia Pacific Region (Westpac, 2018). In this report, the discussion will be made on the Westpac Company. Strategies deployed by Westpac Company  It is important to consider effective strategies by the companies as it can help to enhance the growth in the competit...

About Aberdeen Standard Investment (ASI)Aberdeen Standard Investment (ASI) is devoted to assist investors for attaining their investment objective and widen their financial prospects regarding same. Further, these investments attempt to offer world-class investment knowledge around a breadth of markets as well as asset groups. Their full variety of solutions includes equities, multi-asset, fixed income, independent wealth funds, and property as ...

Learning Objectives AchievedAnswer: Vitragroup is one of the world's largest manufacturer of commercial facade panels. The company manufactures a wide range of facade products, in addition to being the leading producer of coating applicators of wall cladding panels and products with super high performance and flexibility. Our inspiration comes from our vision to be the world's leading manufacturer of quality facade and cladding products; throu...

The concept of Social ResponsibilityThe term social responsibility refers to the social activities done by the company as a part of their social corporate responsibility and the same benefits the society at a larger section. The social responsibility activities of the company involve investing some portion of the company’s profit into the social activities and overall development of the society. The social responsibility is an importan...

Part A: Saving for a House DepositPART A The savings would be in the form of annuity with payments being made at the end. Annuity payment = 0.4*(91000/12) = $ 3,033.33 Total duration of annuity = 5 years or 5*12 = 60 months Interest rate applicable = 2% p.a. or (2/12) or 0.16667% per month The relevant formula to be applied pertains to future value of annuity. Here, P = $3,033.33, n = 60 and r = 0.16667% Thus, FV = 3033.33*(1.001666...

Overview of Exchange Traded Funds (ETFs)Vanguard MSCI Australian small companies index is an exchange traded fund that intends to match the return in terms of capital appreciation and income of the MSCI small cap index Australian shares. The fund is a small capitalisation index that generally involves smaller companies on the equity market of Australia that target coverage of around 14% of free float of market capitalisation of share market th...

Part 1 Beta   1.05                           Rf   0.03                           Risk Premium 0.05                                       &nb...