Finance Essay example
Undergraduate
Essay
Finance & Accounting
Pages 6 (1506 words)
Download 0
“In finance, risk is best judged in a portfolio context." Is this true? Why? Table of Contents Table of Contents 2 Introduction 3 Risk and Return 3 Portfolio Theory 4 Capital Asset Pricing Model 4 Dividend Policy 5 Long Term Financing 5 Capital Structure (Irrelevance) 6  Capital Structure (in market perfection) 6 WACC Capital 6 Option (Financial and Real) 7 Empirical Evidence of Risk in Portfolio Context 7 Reference 8 Introduction In present corporate scenario, the market investors adopt the policy of undertaking diversified investments thereby resorting to a portfolio of investments…

Introduction

investment in diversified portfolio like equity, bond, preference share, different securities etc in domestic as well as international stock market. A number of companies are attached with this investment process where the finance managers and the fund managers of the investment companies are responsible for the whole process of investment by taking into consideration the associated risk factor (Kimmel, 2008 p.145). Risk and Return In case of investment, risk is associated with the financial operation and transaction of securities and stocks (Correia, 2007 p.111). So, the risk of the financial operation is determined by calculating the difference between the expected return and the actual return of the stocks. On the other hand the return on the investment designates the total earnings of the investment. Here the return of the investment may be positive or negative. Rate of return is the fundamental expectation of the investors. ...
Download paper
Not exactly what you need?

Related papers

Finance
Although, it is practically not possible to control some forces that operate outside a business, such as availability of the capital and the world economic conditions, management need to inspire and guide internal operations in helping ensure a secure competitive position within the marketplace. Moreover, both innovation and adaptability are essential in helping gain market share, and stay…
Finance
To conduct this purpose commercial banks tend to lend money to private individuals as well as organizations so these individuals and organizations can use this money to make further investments and conduct expenses. Another purpose of such banks is to accept deposits made by individuals and organizations (Viney, 2009, p.50). Commercial banks even conduct several secondary functions which include:…
finance
This is because when an employee cannot be understood, making good use of that employee will be hard (Arthur, pg 15). From my own perspective, communication skills play a very important role in moving the organization forward. It is through this quality that issues such as conflict, stress in the organization, and also good relationship between senior and junior employee can be managed. From the…
Finance
The capital structures of the companies were affected strongly since the availability of debt capital financing as well as equity capital financing declined considerably. Under influence of the financial crunch firms reduced security issuance and financial institutions reduced issuance of loans by a large extent (Fosberg, 2012). Among many consequences, the major consequence faced by the firms was…
Finance
1. Distribution analysis American Eagle Outfitters (AEO) has got outlets in USA as well as in Canada. All total there are more than 900 stores in and around USA and Canada. There are more than 150 stand alone stores in USA. The compnay has presence in more than 76 different international countries. AEO produces its own products and also sells them under the same brand name. Although the products…
finance
Sainsburys is second in terms of market share, ASDA is third and Morrisons is fourth (with 11.8), according to Reuters Finance. But when we look into market share increase over the past two years we find that Tesco’s profit margin in 2011 was 8.47% and decreased to 8.15% in 2012 perhaps reflecting the overall decline in retail profits due to the weakened economy. It is important to note though…
finance
SOCAR also acts as the major rights holder in the oil and gas industry. It also acts as a government mean to control the oil and gas sector in the state of Azerbaijani. Oil exploration in the Caspian sea began in the year 1992 when the Kazakhstan government announced an oil exploration project in the Caspian sea. The Caspian Oilfields Development Project has an oil exploration scope of operation…