Which investment is the safest and its trend with respect

Assignment Help Finance Basics
Reference no: EM132569647

This figure shows year-by-year historical rates of return (inflation adjusted) for five types of investments instruments traded in the US capital markets from 1925 to 2011. Each line represents the return & risk (beta) relationship of its respective instrument. You have to portfolio report for a Pakistani investor in the US. She wants to know the following details before investing her money in the US capital market as part of her international portfolio diversification strategy.

Which investment is the safest and its trend with respect to inflation. What is the risk-return tradeoff if she invests half of her money in this instrument?

Which type of instrument can earn her maximum return and what would be the risk-return tradeoff in this case if she wants to invest 25% of money in such an instrument?

If you would be investing in all 5 instruments equal amount of money, what risk return motivation in presence of the Inflation, would you be using for this portfolio in light of the information provided in the figure above? (Use macroeconomic analysis and stock returns for equity stocks).

Reference no: EM132569647

Questions Cloud

Calculate the company net cash flows from financing activity : Calculate THE Company's net cash flows from financing activities for 2021. THE Company reported the selected account balances for 2021.
What is trait linked to sex : What is a trait linked to sex? What is the difference in inheritance between boy and girl for traits linked to sex?
What the company collected cash from credit customers : What THE Company collected cash from its credit customers during 2023 in the amount of?THE Company uses the aging method to estimate its bad debt expense.
What is the general purpose of an auditors report : GeoPetro is independent oil and natural gas Company with headquarters in San Francisco, California. What is the general purpose of an auditors report
Which investment is the safest and its trend with respect : Which investment is the safest and its trend with respect to inflation. What is the risk-return tradeoff if she invests half of her money in this instrument?
Find out the amount of money to be invested in stock : You have been given a task by your US based client, to construct a Portfolio for an investor willing to invest $1 million but his portfolio would
Description of the health condition diabetes mellitus : Description of the health condition Diabetes Mellitus. Explain why the resources you chose are appropriate.
Discuss the statutory and common law positions : Discuss the statutory and common law positions of the directors in the case study above. Explain this question with AGLC reference style
Which the carrying amount of the asset exceeds : An impairment loss is the amount by which the carrying amount of the asset exceeds the sum of the expected future net cash flows.True/false

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the three day value at risk for the portfolio

A portfolio consists of $450,000 in Google stock and $600,000 in Disney stock. Volatility on a daily basis are 2.2 % and 1.4% respectively with a correlation.

  What is the company wacc in given case

Debt: 10,000 6 percent coupon bonds outstanding, $1,000 par value, 15 years to maturity, selling for 105 percent of par; the bonds make semiannual payments.

  Kritzberg company sells a product at 60 per unit that has

kritzberg company sells a product at 60 per unit that has unit variable costs of 40. the companys break-even sales

  State the algebraic sign of the npv

If a project with conventional cash flows has a payback period less than the project's life, can you definitively state the algebraic sign of the NPV?

  Which indicates that the firm value will decline

You should recommend that the project be rejected because, although its NPV is positive, it has an IRR that is less than the WACC.

  Geographic differences in import tariffs

What are two ways in which a company can utilize geographic differences in import tariffs to it's advantage in the footwear industry?

  What are the consequences of waiting five years

If Britney makes $5,000 annual contributions to her Roth IRA, and she earns an 8% return, she'll have approximately $2 million saved for retirement.

  Calculate your monthly principal and interest payment

Calculate your monthly principal and interest payment? What is the APR (actual/true/effective rate of interest) on the loan?

  What are the break-even levels of ebit

Leverage and Stock Value. Ignoring taxes in Problem, what is the price per share of equity under Plan I? Plan II? What principle is illustrated by your answers?

  What is the firm pre-tax cost of debt

Four years ago, the Moore Co. issued 15-year, 7.5 percent semiannual coupon bonds at par. Today, the bonds are quoted at 101.6.

  What are the net earnings from self-employment

A taxpayer operates a direct marketing business and reports gross income of $1,800 and net profit of $1,000. In computing self-employment tax.

  Qualitative factor that should be considered prior

For each of the following situations, indicate a qualitative factor that should be considered prior to making the decision:

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd