Discussion Questions Please discuss the following questions in your initial post What are the results of your Risk Tolerance Questionnaire? What type of investor are you? Be sure to explain what this designation means, and if you feel that your score accurately reflects your personality regarding investing. Your choices are: oMoney Market mutual fund AAA rated Corporate bond US Government Treasury Bond A Corporate Junk bond o A "Blue Chip" stock An emerging market stock With this investment philosophy in mind, select one investment from the list above that you feel is the best match for your philosophy. Please explain why you feel this is the best match Identify an investment that would best suit Samantha's and Martin's level of risk Contrast your investment risk tolerance level with Martin and Samantha What is different about the investment that you advise for each of them?
Homework Answers
- Using a generic risk tolerance calculator, I am an aggressive investor. This means that my willingness and capacity to take risk are high. The factors that influence this are my young age (long time horizon for investment), and my alternate sources of income (I do not depend on investment income for my annual expenses). This reflects my personality regarding investing as I do my own investment research, and am always looking out for new opportunities.
- The best match for my personality is the emerging market stock. Bond funds and money markets funds do not offer adequately high returns, which is due to their below average risk. Blue chip stocks have higher risk and higher return than bond funds. However, emerging market stock has the highest risk, and also the highest potential return.
- As Samantha has an above-average risk profile, Blue chip stock is best suited for her. They are high quality stocks with large market capitalization. As Martin is a conservative investor, Money market mutual funds or AAA rated corporate bonds are best suited for him.
- My investment risk tolerance is higher than Martin and Samantha. The investment advised to Samantha has higher risk, but also higher potential return. This is because she has above-average risk profile. The investment advised to Martin is below-average risk, but offers lower potential returns.
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Instructions Please read the following scenario, complete the required task, and discuss the questions below. Martin...
Need help on these 4 multiple choice questions please! 2 Marks and has only one correct...
Need help on these 4 multiple choice questions please!
2 Marks and has only one correct answer. 1. Which of the following is NOT an advantage of investing in an open-end mutual fund A. Professional management B. Daily liquidity C. You can buy units of the fund on margin or sell short D. Provides an opportunity to easily invest in global markets E. None of the above. All are advantages of investing in open-end mutual funds rou purchased a mutual...
The following questions are in order: Question 1 1 pts The following data applies to Questions...
The following questions are in order:
Question 1 1 pts The following data applies to Questions 1 to 3 Consider two risky assets: a stock fund and a bond fund with the following probability distributions. Scenario Severe recession Mild recession Normal growth Boom What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth. For example, if your answer is 10.2511%, then type in 10.25 Probability 0.05 0.25 0.40 0.30...
INSTRUCTIONS: ATTEMPT ANY FOUR (4) QUESTIONS a. Question 1 A mutual fund is a professionally managed...
INSTRUCTIONS: ATTEMPT ANY FOUR (4) QUESTIONS a. Question 1 A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests in stocks, bonds, short-term money market instruments and other securities. The performance of these mutual funds and the portfolio they build needs to be evaluated as frequently as possible. Evaluating the performance of these mutual funds is important for both existing and potential investors. The Table below provides the average return,...
Already uploaded this question and the answer was wrong. Please only answer if you know you...
Already uploaded this question and the answer was wrong. Please
only answer if you know you are correct. Thank you!
The following data applies to Questions 4 to 9. A pension fund manager is considering three investment options. The first is a stock fund, the second is a corporate bond fund, and the third is a T-bill money market fund (the risk-free asset) that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected return...
help pls Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plan...
help pls
Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plans to invest in the common stock of Smart-investment Corporation Knowing that you are studying finance, she asks for your suggestion. You calculation shows that yield on Treasury securities is 6%. You know that the S&P 500 Index's expected annual return is 14% Your coonometric model tells you that beta of this company's stock is 1.25. Aunt Beth tells you that this company...
This is for my intro to business, I need help with the Multiple choice question. I need help with all the questions, I...
This is for my intro to business, I need help with the
Multiple choice question. I need help with all the questions, I did
answer some of the question but I'm not sure if they're correct or
not
Multiple Choice - circle letter corresponding to the correct answer. 1. A is a registered representative acting as an intermediary to buy and sell securities for clients. A. certified stock underwriter lockbroker C. securities banker D. trading accountant 2. When an investor...
Consider the following assets available for investment: 1. A stock index fund 2. A corporate bond...
Consider the following assets available for investment: 1. A stock index fund 2. A corporate bond fund 3. A utility fund 4. A global fund 5. A treasury fund You have research on the funds that has projected out the expected returns (in percent) for the funds along with the probabilities of those returns occurring. The following table shows the expectations: probability CBFUF SIF -18 Rec 15 -5 GF TE -20 3 -10 153 N Rec -7 wwww norm .3...
3. You have a risky portfolio that yields an expected rate of return of 15% with...
3. You have a risky portfolio that yields an expected rate of return of 15% with a standard deviation of 25%. Draw the CAL for an expected return/standard deviation diagram if the risk free rate is 5%. a. What is the slope of the CAL? b. If your coefficient of risk aversion is 5, how much should you invest in the risky portfolio? 4. A pension fund manager is considering three mutual funds. The first is a stock fund, the...
28 - 33 Questions 28-34 are based on the following information Personal finance. Suppose you are...
28 - 33
Questions 28-34 are based on the following information Personal finance. Suppose you are an engineer and your spouse is a sales person. Neither of you knows finance, economics or financial statement analysis. Both you and your spouse are salary carners. Both are paid each month 28. After allocating sufficient money to your monthly living expense, mortgage education, other necessary expenses and emergency fund, you would like to use the remaining salary to do which of the following...
I need help calculating all kf these questions. Really stuck on all of them! Thank you!...
I need help calculating all kf these questions. Really stuck
on all of them! Thank you!
Year using the returns for the first three years. The next rolling ace would be calculated using the returns from Years 2. 3. and 4, and so on Using the annual returns for large company stocks and Treasury bills, calculate both the 5- and 10-year rolling average return and standard deviation. h Over how many 5-year periods did Treasury bills outreform Caree company stocks?...
Need help on these 4 multiple choice questions please!
2 Marks and has only one correct answer. 1. Which of the following is NOT an advantage of investing in an open-end mutual fund A. Professional management B. Daily liquidity C. You can buy units of the fund on margin or sell short D. Provides an opportunity to easily invest in global markets E. None of the above. All are advantages of investing in open-end mutual funds rou purchased a mutual...
The following questions are in order:
Question 1 1 pts The following data applies to Questions 1 to 3 Consider two risky assets: a stock fund and a bond fund with the following probability distributions. Scenario Severe recession Mild recession Normal growth Boom What is the expected return for the bond fund? Your answer should be in percentage points and accurate to the hundredth. For example, if your answer is 10.2511%, then type in 10.25 Probability 0.05 0.25 0.40 0.30...
INSTRUCTIONS: ATTEMPT ANY FOUR (4) QUESTIONS a. Question 1 A mutual fund is a professionally managed type of collective investment scheme that pools money from many investors and invests in stocks, bonds, short-term money market instruments and other securities. The performance of these mutual funds and the portfolio they build needs to be evaluated as frequently as possible. Evaluating the performance of these mutual funds is important for both existing and potential investors. The Table below provides the average return,...
Already uploaded this question and the answer was wrong. Please
only answer if you know you are correct. Thank you!
The following data applies to Questions 4 to 9. A pension fund manager is considering three investment options. The first is a stock fund, the second is a corporate bond fund, and the third is a T-bill money market fund (the risk-free asset) that yields a sure rate of 5.5%. The probability distributions of the risky funds are: Expected return...
help pls
Questions 21-27 are based on the following information. CAPM and stock valuation. Your aunt, Beth, plans to invest in the common stock of Smart-investment Corporation Knowing that you are studying finance, she asks for your suggestion. You calculation shows that yield on Treasury securities is 6%. You know that the S&P 500 Index's expected annual return is 14% Your coonometric model tells you that beta of this company's stock is 1.25. Aunt Beth tells you that this company...
This is for my intro to business, I need help with the
Multiple choice question. I need help with all the questions, I did
answer some of the question but I'm not sure if they're correct or
not
Multiple Choice - circle letter corresponding to the correct answer. 1. A is a registered representative acting as an intermediary to buy and sell securities for clients. A. certified stock underwriter lockbroker C. securities banker D. trading accountant 2. When an investor...
Consider the following assets available for investment: 1. A stock index fund 2. A corporate bond fund 3. A utility fund 4. A global fund 5. A treasury fund You have research on the funds that has projected out the expected returns (in percent) for the funds along with the probabilities of those returns occurring. The following table shows the expectations: probability CBFUF SIF -18 Rec 15 -5 GF TE -20 3 -10 153 N Rec -7 wwww norm .3...
28 - 33
Questions 28-34 are based on the following information Personal finance. Suppose you are an engineer and your spouse is a sales person. Neither of you knows finance, economics or financial statement analysis. Both you and your spouse are salary carners. Both are paid each month 28. After allocating sufficient money to your monthly living expense, mortgage education, other necessary expenses and emergency fund, you would like to use the remaining salary to do which of the following...
I need help calculating all kf these questions. Really stuck
on all of them! Thank you!
Year using the returns for the first three years. The next rolling ace would be calculated using the returns from Years 2. 3. and 4, and so on Using the annual returns for large company stocks and Treasury bills, calculate both the 5- and 10-year rolling average return and standard deviation. h Over how many 5-year periods did Treasury bills outreform Caree company stocks?...
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