We will use dividend discount model to adjust the foreign exchange movement. Since foreign stocks pay the dividends with the denominated currency. Typically, the cash flow of the investor is denominated in foreign currency. Due to the uncertainty of the exchange rates, the dividends of the investors will be adjusted based on the movement of foreign currency. Moreover, we will use risk-free interest rate for investor.
Based on the data in Table 2, it is revealed that all selected securities are having beta lower than 1. Typically, the selected securities are defensive stocks and defensive stocks are usually less volatile with high beta because they tend to perform better during recession as well being stable during recession. Thus, we select the defensive stocks to protect our position. To spread our investment around the overall portfolio, we select the securities portfolio with the lowest standard portfolio and stock with highest return to satisfy client risk averse preference.
Based on the data presented in Table 3 and Fig 1, the returns of all our select stocks increase from the year 2000 to 2009. With the brilliant performances of our selected stocks from 2000 and 2009, the stocks will perform brilliantly when our clients invest in our portfolio.
TABLE 3: Returns of the 10 Selected Stocks from 2000 to 2009
Associated British Foods
Bunzl
Compass Group
Dieago
Experian
G4S
Pearson
Tate & Lyle
Rangold Resources
Fig 3: Return Performances of Selected Stock from 2000 and 2009
From the data presented, the 0.66% Beta with the 38.1% return reveals that the portfolio selected for investment is portfolio with lowest risks. Our objective is to minimize the Beta and the minimum value of the Beta of selected 10 stocks is 0.4. % and the return is 38.1% as being revealed in table 3 and table 4.
Table.4: Portfolio between January 2000 and 2009
Return
38.01%
Yearly Beta
0.66
Initial Investment Value as of January 2000
£100,000
Initial investment by December 2009
£342,000
Return on the investor fund from January...
investment management in the financial sector. The paper highlights the world's present macroeconomic situation. It further details the macro economic situation and the way it affects investment decisions in several investors. In addition, the paper describes a sample investment programme and provides critical decisions to investors as well as investment vehicles used by the investment moguls. The paper summarises practical exercises in compound investment management growth and the use
When looking at risk, the fund does have a beta higher than that of its large cap blended peers. The beta of the fund is roughly 1.23 as compared with a beta of 1.04 for many of its peers. This can be attributed to the large concentration in financial stocks which tend to have high betas relative to the market. This is to be expected as financial shares raise disproportionately
Investments Assets Stocks A stock is a share of ownership in a company, representing a claim on the company's assets and earnings. The importance of being a shareholder is that the investor has a claim on assets and is entitled to a portion of the company's profits, which may be paid out in the form of dividends (Stock basics, 2011). There are positive and negative aspects to stock ownership. One such positive is
Management Over the last several years, a wide variety of financial institutions have been facing a number of different security challenges. This is because of the information that they are storing has sensitive data about their clients such as: the social security numbers and net worth. Over the course of time, this has become a major target for identify thieves who are looking to steal this material. At which point,
Table of ContentsContentsTable of Contents 1Executive Summary 11. Introduction 12. Asset classes 12.1. Australian Shares (AUD) S&P/ASX 200 12.2. Australian Bonds (AUD) 22.3. US Shares S&P500 22.4. US Federal Funds Rate 22.5. Brent Oil (USD) 24. Efficient portfolios 35. Modern portfolio theory 46. Conclusion and Recommendation 5References 5Appendix 6Appendix 1: Arithmetic & Geometric Mean, Standard Deviation & Variance 6Appendix 2 Correlation Matrix 6Appendix 3: Covariance Matrix 6Appendix 4: Bordered Covariance
After the economic Collapse, precious metals like Gold and Silver have become the safe heaven investment for the investors. Investors know that they will get a high return by investing in these precious metals. The performance of the Gold can be judged from the below mentioned Gold graph. The red line indicated that the Gold has completed almost a 100% ride in just 3 years because of the intentions of
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now