Making a portfolio always give something extra ordinary to the investor and investors always like to have making a portfolio, as it not only increase its return but it also decrease the risk association from the same. Passive Investment strategy would be taken into account for the same. Passive investment can also be stated as passive management. It is a financial approach which refers to get hold on active selling and purchase dealings in short term profitability scenarios while having an intension to make investment in secure long term profitability with a minimum usage of resources (John L. Maginn, 2010). The passive investment approach is hugely relied and believes on pre determined strategy where there is no span for any potential anticipation rather strongly belief by fund manager or any financier to invest in long-standing period will be highly cost-effective. The whole stance is to evaluate the investment to its minimum level and to keep away negative impacts in the case of malfunction in order to appropriately forecasting. Passive management is extremely viable in stock market in which index tracker is used to assess the index for equity market (John L. Maginn, 2010). Now days, it is gaining popularity and also being exploited progressively in other types of investment portfolios include bonds, supplies and hedge funds. The passive investing strategy is comprised under the following points: Maintaining a low cost, and to avoid unnecessary transactions Keep considering all the markets and avoid excessive disclosure to a specific industry Investment in the view of long-standing perspective Average Return of the Stocks Five years of return has been taken into consideration for the same. Average means, mean return which has been analyzed from different angles in total. The average return of all of the five stocks are mentioned below, ANZ Contact Hallenstein SKY CITY Port Of Tarunga NZX 50 MEAN RETURN 15.92% 1.46% 14.90% 4.88% 17.91% 1.23% The mean return of ANZ and Port of Tarunga are two of the major stocks which yields high return in total. The mean return of ANZ is 15.92%, while the mean return of Port of Tarunga is 17.91%. Both of the returns are high in nature. Apart from these two stocks, Hallenstien is yet another stock which has a mean return of 14.90%, while SKY City, Contact and NZX 50 has a mean return of 4.88%, 1.46% and 1.23% respectively. If it is extremely important for Mr. Thompson to put their money in the stocks this yields high return. Leaping over the result right away is not at all a good sign as there are other provisions as well, which could be taken account in the same. If equally dividing the proportion of 2 million then 1/6 = 16.66% would be allocated to each stocks, let’s find the average return in this scenario, = 2,000,000/6 = $ 333,400 In this scenario a net return of 9.38% could be envisaged which increased the financial portfolio of the company to a level of $ 2.18 million. Let’s now examine the standard deviation of each stock and then its correlation. Standard Deviation and Correlation Standard Deviation, Sharpe Ratio and Beta are all the same things and it analyze the essence and involvement of risk in a stock. This particular thing would be quite skeptical and important from the standpoint of an investment and analysts always try to enhance their portfolio by analyzing the same thing in total. The computed S.D of all of the
Investment and risk are the two sides of a same picture. If a coin is tossed then there is always a risk associated with the same. There are number of things associated with the same. According to the provision, it is found, when there is investment, and then there would be a provision of risk as well…
“Malaysia, a middle-income country, has transformed itself since the 1970s, from a producer of raw materials into an emerging multi-sector economy. Under Prime Minister NAJIB, Malaysia is attempting to achieve high-income status by 2020, and to move farther up the value-added production chain by attracting investments in Islamic finance, high technology industries, biotechnology, and services”1 In the year 2007, Malaysia’s economy was the 3rd main financial system in South East Asia, and the 28th biggest economy in the world, by purchasing power parity among gross domestic products for the year 2008.
This study utilized the articles and reports of authentic journals and working papers published by educational, financial and environmental institutions. The findings suggest that perceptions of political and legal nature, corruption, and economic risk can hinder project finance and foreign investments in the Indian market.
The project aims to find the feasibility of the project after a critical financial analysis. The risk inherent to implementation of the project is also being considered and the impact of the risk on the facility to be generated is also considered. The final decision underlying the acceptability of the project is considered after taking all the factors in consideration.
Taking this strategic move into account, the company is conducting an investment appraisal in order to evaluate which of the two options is more financially feasible. The company’s cost of capital is 12%. It is assumed, in the absence of information provided, that this is the weighted average cost of capital (WACC) for the company which is calculated with the help of the following formula.
Savings Definition Savings is the amount of the disposable income which is not spent on the consumption or use of consumer goods. It is either accumulated or directly invested in payment of home mortgage, in capital equipment etc. It can also be invested indirectly by purchasing the securities.
Its hotels and lodging services include both company operated as well as “franchised properties” and their revenue earnings for the fiscal year 2012 have registered a whopping “$12 billion” (par.1). The company’s headquarters is located in Bethesda, Maryland, USA and it is “founded by” J Willard and Alice Marriott and led by “Marriott family leadership” for over eighty years (par.1).
We begin the first part with a summary of the case and a brief discussion of important concepts related to financial investments, the purpose and methods of investments, how investment decisions are made, and the financial tools available for such decisions to be made.
Less prevalent was compensation tied to firm's performance, such as stock and/or stock options. Historically, performance-based compensation was designed for corporate executives and officers of the firm. This form of compensation helped align the interests of management and shareholders.