Return for each investment and portfolio return

Assignment Help Financial Management

Reference no: EM132014358

Use the $80,000 to invest evenly in the two stocks which you have selected based on a 50% margin (currently stock margin is 50%) which give you a leverage of 2 to 1, meaning you can invest up to $160,000 in both stocks. The following are some more requirements:

Prepare a brief profile of each corporation in which you have invested your client's fund.

You may take a long or short position in each stock or long position in one or short position on the other.

Justify your investment decisions based on the health of the firm such as profitability based on the income statement, debt to equity ratio based on the balance sheet, expected cash flows, innovations, and some other variables you may consider are important.

Justify your investment decisions based on the health of the industry. For instance, if the housing market is in trouble, hedge fund managers may take short positions in some stocks of this industry.

Justify your investment decisions based on the health of the economy. For example, when the economy is growing and the job market is healthy, most stocks are rising and investment managers take long positions in many stocks.

You may also justify your investment decisions based on monetary or fiscal policies taken by the policy makers.

Select the two stocks which have negative correlations or a weak correlation for your portfolio for risk management purpose.

Calculate your return for each investment and your portfolio return.

Reference no: EM132014358

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