Finance Assignments - 1084 Words

1. Diversity is the quality of difference within any given grouping. In discussing financial and investment, this term is used to denote the variation within any grouping of investments. The term is quite relative, but also signifies a certain important traits within this realm of discussion. 1a. A substantial and unexpected increase in inflation would be an undiversified risk in most cases. Since inflation affects the entire band of investing in any given currency, any investment made in that particular currency would be exposed to that risk. 1b. A major recession in the US would also be an undiversified risk. A recession is not diverse in nature and affects all economic trade under its influence. 1c. A major lawsuit filed against one large, publicly traded corporation signifies a very diverse risk. The specific problem of having just one organization being a target denotes that this is diverse risk 2. Ri=Rf + Ba (Rm-Rf) = Expected rate of return 2a. 10.67% 2b. 10.14% 2c. Since beta is the ratio of the volatility between the market and its returns, the number should reciprocate at 1.0 if the market is truly balanced, which I assume it is. 3. The main message of the Capital Asset Pricing Model (CAPM) attempts to find value in financial assets by connecting an assets return and its risk. It is a simple analytical tool used to find a rather straightforward and simple question: How much risk is contained in this investment? Since the CAPM uses only two trueShow MoreRelatedFinance Assignment1538 Words   |  7 Pages1 Question 1 (16 points) Carol Inc is considering the following three prices to charge customers for each of the candy packets they produce: i) $2.20 ii) $2.00 iii) $1.70 The relevant data for decision-making is below: Fixed Costs = $1200 Variable Costs = $0.50 per unit Calculate the following: a) The Breakeven Point for each price level b) Using price of $2.20 what would be the new breakeven point if (1) fixed costs decreased to $1000 all else remaining the same, (2) Variable costs increased toRead MoreEntrepreneurial Finance Assignment 12511 Words   |  11 PagesEntrepreneurial finance assignment 1 Problem 4.4. Introduction The CAPM model can be used to analyze the performance of a portfolio of investments. The model should be calculated by comparing the return of assets (Ri) minus the return of risk-free cash (Rf) of the fund against those numbers of a known index with historical data (Rm). 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Eg The font you can use is Calibri, sizeRead MoreWeek 3 Individual Assignment Fin/419 - Finance for Decision Making1390 Words   |  6 PagesWeek 3 Individual Assignments Finance for Decision Making FIN/419 January 30, 2012 Chapter 4: Problem 4-23 – Personal Finance Problem Funding your retirement - You plan to retire in exactly 20 years. Your goal is to create a fund that will allow you to receive $20,000 at the end of each year for the 30 years between retirement and death (a psychic told you would die exactly 30 years after you retire). 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At an interest rate of 6%, how much does Shawn need to set aside today to purchase the telescope in one year? Q4.)Johnny andRead MoreFinance Assignment 13198 Words   |  13 Pagesï » ¿JWI 530: Financial Management I Academic Submissions and Evaluations Assignment 2: Management Accounting Application Due Week 10, Day 7 (Weight: 22.5%) In this assignment you will demonstrate your understanding of capital investment techniques by evaluating the following three case studies. The homework answers and all this homework help was offered at and you should not submit or make it your own. We provide homework answers at http://allhomeworktutors.com/ and the work may have already