so he will be able to contribute $110,000 to add to the current portfolio. He wants to be able to retire in 20 years, by age 65, and would like to have at least a million dollars for retirement as well as a surplus of greater than or at least $40,000 in order to pay for his new step-son’s college fund. He would like to be able to only use about half of the retirement to live off of, and keep the rest either invested in his portfolio, or set up college funds, IRA’s, etc. to help his family with his
Words: 2210 - Pages: 9
MSc Corporate Finance Dr. Kirak Kim Before we start Main branches of finance Corporate Finance How do we value projects and (optimally) finance them? Asset Pricing How do we price securities more precisely? What’s the difference? Is it a Corporate Finance question or an Asset Pricing question? □ You are the manager of Intel Corp. You are reviewing the proposal for the new plant to be built in China. The new plant requires a large onetime investment but will provide significant
Words: 8376 - Pages: 34
allocation program that currently includes only stocks, bonds, and cash alternatives (risk-free-money market investments), which of the properties of real estate returns affect portfolio risk? Explain. a. Standard Deviation b. Expected Return c. Correlation with the returns of other assets (a) and (c). The portfolio risk (standard deviation) calculation now includes the variance of real estate returns and correlation between real estate and stocks the correlation between real estate
Words: 4199 - Pages: 17
Compiled by Allan Simiyu for BBM 312 Students only 1 CHAPTER ONE INTRODUCTION 1.1 Introduction Whether a business concern is big or small, it needs finance to fulfill its business activities. Finance may be defined as the art and science of managing money. According to Oxford dictionary, the word ‗finance‘ connotes ‗management of money‘. Webster‘s Ninth New Collegiate Dictionary defines finance as ―the Science on study of the management of funds‘ and the management of funds as the system that
Words: 23807 - Pages: 96
Chapter 06 Efficient Diversification 1. So long as the correlation coefficient is below 1.0, the portfolio will benefit from diversification because returns on component securities will not move in perfect lockstep. The portfolio standard deviation will be less than a weighted average of the standard deviations of the component securities. 2. The covariance with the other assets is more important. Diversification is accomplished via correlation with other assets. Covariance helps determine
Words: 2876 - Pages: 12
------------------------------------------------- Portfolio Composition The Money Team designed this portfolio September 27th, 2013 with the plan to invest mainly in large cap and high growth U.S equities. All equities were purchased on that date with the intention to hold them until December 6th, 2013. The primary goal of this portfolio was to maximize growth and value of the portfolio through an active investment strategy. This portfolio was concentrated in large cap U.S equities and domestic
Words: 3822 - Pages: 16
D. factor betas E. B and D The coefficients are called factor betas, factor sensitivities, or factor loadings. Difficulty: Easy 6. Which pricing model provides no guidance concerning the determination of the risk premium on factor portfolios? A. The CAPM B. The multifactor APT C. Both the CAPM and the multifactor APT D. Neither the CAPM nor the multifactor APT E. None of the above is a true statement. The multifactor APT provides no guidance as to the determination of the risk
Words: 4147 - Pages: 17
CAPITAL ASSET PRICES WITH AND WITHOUT NEGATIVE HOLDINGS Nobel Lecture, December 7, 1990 by W ILLIAM F. S H A R P E Stanford University Graduate School of Business, Stanford, California, USA INTRODUCTION* Following tradition, I deal here with the Capital Asset Pricing Model, a subject with which I have been associated for over 25 years, and which the Royal Swedish Academy of Sciences has cited in honoring me with the award of the Prize in Economic Sciences in Memory of Alfred Nobel. I first present
Words: 9378 - Pages: 38
Australian School of Business School of Banking and Finance FINS 2624 Portfolio Management Course Outline Semester 2, 2012 Part A: Course-Specific Information Part B: Key Policies, Student Responsibilities and Support Table of Contents 0 PART A: COURSE-SPECIFIC INFORMATION 1 2 2.1 2.2 2.3 2.4 2.5 3 STAFF CONTACT DETAILS COURSE DETAILS Teaching Times and Locations Units of Credit Summary of Course Course Aims and Relationship to Other Courses Student Learning Outcomes LEARNING AND TEACHING
Words: 4844 - Pages: 20
------------------------------------------------- MAF707 Portfolio investments and Financial Planning ------------------------------------------------- Group Assignment Group 77: Weizhe Shi_900443906 Ran Li_210037023 Yichao FU_900387184 Contents Question 1 3 Analysis of securities and the market index 3 Summary 3 Question 2 7 Question 3 8 Question 4. 9 Standard Consumption of CAPM 9 Expectation errors relied
Words: 3831 - Pages: 16
