Calculate the expected return for MTN and Dischem

Assignment Help Financial Accounting

Reference no: EM132782774

Problem - PORTIFOLIO MANAGEMENT - You are considering investing in two stocks MTN and Dischem. However you are worried about the impact of Covid-19 on the performance of the South African economy. Economists predict the following probabilities for the performance of the South African economy.

Scenario	Probality	Return MTN	Return Dischem
Super Boom	15%	25%	32%
Boom	20%	20%	23%
Normal	30%	10%	15%
Recession	35%	-30%	-22%

Required -

1. Calculate the expected return for MTN and Dischem.

2. Calculate the expected return of the portifolio assuming that you invested 35% in MTN and 65% in Dischem.

3. Discuss the advantages of investment diversification in portifolio management?

Reference no: EM132782774

Questions Cloud

What are the contingency approaches : What are the contingency approaches? Do you think that most managers in real life use a contingency approach to increase their leadership effectiveness? Explain

Identify the function of management : According to a study, an average a worker can assemble ten machines in a day. The target volume of the company in a day is assembling of 2,000 units.

Examine the key elements of total quality : Examine the "Key Elements of Total Quality" that are listed in below. Which four of these twelve elements are most important to you? How have these

Describe the key features of an invoice : Describe the key features of an invoice and explain how it is used for processing transactions in a computerized accounting syste and provide the example.

Calculate the expected return for MTN and Dischem : Calculate the expected return for MTN and Dischem. Calculate the expected return of the portifolio assuming that you invested 35% in MTN and 65% in Dischem

How do organizing activities in a virtual organization : How do organizing activities in a virtual organization differ from more traditional approaches?

What net gain should be reported for discontinued : Disregarding income taxes, what net gain (loss) should be reported for discontinued operations in Greers 2003 income statement?

Importance of current data in a swot analysis : What is the importance of current data in a SWOT analysis? How do you identify the SWOT factors in a fictitious firm?

Behavioral and contingency leadership theories : State the major difference between behavioral and contingency leadership theories, and explain the behavioral contribution to contingency theories.

User Account

All Pages