Portfolio

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Riphah International University Islamabad Main Campus *

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Finance

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Nov 24, 2024

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1. Introduction British banks and other financial institutions typically make use of client investment portfolios as a method for effectively managing their clients' money. One of the fundamental principles of portfolio management is diversifying an investor's holdings so as to maximize return while minimizing risk. This strategy seeks to maximize profit while minimizing risk. Monitoring the production of the company's many divisions is essential in order to effectively manage the portfolio of a company. Companies all throughout the world, including those in the UK, utilize portfolio models to figure out how to most effectively distribute limited resources among their many departments. The BCG Matrix and the GE Matrix are considered to be two of the most popular portfolio models that are used in the UK. The success of each of these strategies is contingent on having some sort of standard by which to classify items and enterprises in terms of their respective market shares and potentials(Johnson, M. (2020). Harry Markowitz, the developer of one of the portfolio models that is one of the most extensively utilized, is typically cited by specialists in the field of finance (MPT). The Modern Portfolio Theory (also known as MPT) is a series of mathematical rules that were developed by the financial industry with the intention of assisting investors in locating an optimal balance between risk and return. According to modern portfolio theory, investors now have a blueprint for designing portfolios that optimize returns while avoiding risks. This blueprint may be found in the modern portfolio theory. Both of these scenarios are just as feasible as the other. This strategy does not place a higher priority on minimizing losses than it does on earning gains. The Modern Portfolio Theory (also known as MPT) is built on the principle that investors should spread their holdings among a wide variety of asset classes, economic fields, and geographic areas. It is possible to minimize the risk of a portfolio while also increasing its returns by spreading the holdings of that portfolio across a wide variety of asset classes. Risk and return are intrinsically connected, which is the core concept of the Modern Portfolio Theory (MPT). To restate this idea in a another way, those who are prepared to take larger risks will be rewarded more lavishly, but those who prefer to play it safe would receive a smaller dividend.. 2. Ebay Background

Through its global online marketplace, eBay Inc., which is headquartered in San Jose, helps to enable commerce all over the world. Transactions between clients and sellers can be completed on the website operated by the company(Wilson, L., 2021). eBay was established in 1995 by Pierre Omidyar, and it rose to prominence very fast to become one of the most well-known companies on the Internet. eBay had a market worth in the billions of dollars in the beginning of 2019 and provided services to clients in more than 30 countries. In the realm of finance, "selection" refers to the process of choosing assets and/or companies to include in a portfolio. Selection can also refer to the portfolio itself. When setting together a diversified portfolio, it is essential to take into account the investor's level of comfort with risk, the length of time horizon, and the current state of the market. When planning to make an investment, variety should be your main goal, regardless of whether it is in products, services, or businesses. Ebay’s portfolio management Using the facilities provided by eBay, managing a portfolio is a piece of cake. Because of the flexibility of its business model, the company may be able to provide its clients with additional services in addition to e-commerce. When it comes to the management of my investments, eBay is one of my go-to alternatives. This is due to the fact that the company has a very adaptable business plan, which enables it to profit from a wide range of channels, including but not limited to online sales, cloud computing, and digital content distribution. Because of this, the company is able to profit from a wide variety of channels, it is one of my go-to options. Because of this, eBay has quickly become one of the most important places for me to shop on the internet. You can lessen the impact of a reduction in revenues in any one area if you diversify your income

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streams and bring in money from a variety of sources. eBay has a significant amount of space for growth, particularly in economies that are still in the process of developing and when new consumer subsets are identified. Due to the constantly high quality of its goods and services, eBay has established itself as the leader in a number of niches within the business. Our current market share ensures the continued success of our business in the years to come. The success of eBay can be credited to the company's dedication to the development of new technology as well as its excellent customer service. It is essential for businesses to set themselves apart from their rivals in the market Financial performance eBay is a potentially lucrative investment opportunity because to the company's strong financial performance, diverse asset base, potential for future expansion, dominant market position, and well-known brand name. This is due to the fact that eBay has built a reputation for being a trustworthy company. If you are wanting to diversify your holdings and obtain exposure to rapidly expanding industries like e-commerce and technology, adding eBay stock to your portfolio is a wise move that you should consider doing(Thompson, R. (2021). 3. Portfolio model  The Markowitz portfolio theory, sometimes known as MPT, is a paradigm for managing investment portfolios with the intention of maximizing profit while minimizing loss. It was developed by Harry Markowitz. From this point forward, "Modern Portfolio Theory" will be abbreviated to "MPT" in an effort to reduce the likelihood of misunderstandings. In the year 1952, Harry Markowitz developed a strategy for analyzing potential investment possibilities using this idea as the foundation. Markowitz made allowances for these in the model he developed.  In order for Markowitz's portfolio theory to be successful, there must be a way for risk to be distributed. When building together a portfolio, the key principle of this school of thought is that investors should give priority to holding assets that have a low degree of correlation with one another and with the other assets in the portfolio. Intelligent investors frequently engage in the strategy of spreading their holdings across several markets. The goal of the plan is to lessen exposure to the possibility of suffering a loss as a result of the poor performance of a single asset.Because of its universal recognition as a

solid method and Markowitz's portfolio theory's prominence in the financial world, our company bases its asset allocation on it. The implementation of this method can assist business owners in maximizing profits while simultaneously reducing risk.( eBay Inc. (2022)  Information that is exclusive to eBay and cannot be found anywhere else, such as the fact that predicting eBay's return rate requires looking at both the company's past and its future performance, is not available. This judgment is confirmed, to a significant extent, by the proven track record of eBay as well as the potential future that lies ahead. eBay faces a number of obstacles, some of which include uncertainty in the market, severe competition, and regulation from the government. Do not discount the tremendous influence and extensive choices offered by eBay. The covariance is an important statistical measure that may be used to evaluate the degree of correlation that exists between two different financial assets. By analyzing the correlation that exists between the two, it is possible to infer the level of dependence that exists between eBay and the portfolio. For this determination, both historical and up-to-date information about the market would be used. The Markowitz portfolio theory can be applied to the process of building an investment portfolio that seeks to maximize returns while reducing risk. This is accomplished by selecting assets that have low correlations to one another and by striking a balance between the expected returns and hazards of each asset.. 4. Funding and its allocation  Spending on marketing and advertising helps get the word out to potential buyers about Ebay and the products it offers. As a result, Ebay can better compete with other similar sites and keep its dominant position in the market.  The Online Commercial Center eBay's logistics and order processing systems are crucial to its success. By spending money here, eBay will be able to speed up shipping, lower expenses, and provide better service to its consumers.  Ebay must invest more in R&D if it wants to maintain its innovative and competitive edge. Ebay's propensity to invest in research and development has allowed the company to expand into new markets, enhance its present offers, and test the waters in previously uncharted territories.

 Funding allocations may need to be reevaluated in light of changes in Ebay's priorities and the state of the economy. 5. National culture  National culture may have a substantial impact on the degree to which certain forms of entrepreneurship on eBay can achieve success. This is because of the ways in which national culture influences the attitudes, standards, and behaviors of individuals and enterprises in the community in which eBay operates. There is a possibility that cultural factors, like as the country's legislation that encourages entrepreneurship, have contributed to eBay's success in the country.It's possible that eBay will do well in countries with less regulations, particularly those that emphasize innovation and taking risks. Societies that are stable and predictable will fare well if they take measures to mitigate the risks that they are exposed to.If it is socially unacceptable for businesses to fail in your society, eBay could profit from implementing policies that provide failsafes for company owners. It is more likely for a society to adopt policies that encourage risk- taking and education if its citizens view mistakes more as opportunities for progress rather than as tragedies.( Smith, 2020).  eBay could do well in countries with cultures that respect self-determination and achievement since these countries are more likely to have laws that are conducive to business. Both social entrepreneurship and the improvement of neighborhoods thrive in environments that recognize and encourage the contributions of individuals as well as those made by groups of people.  • It's possible that eBay will fare better in countries with policies that make it easier to start and run a business if those countries adopt those regulations. The economies with the fewest restrictions on business activity stand to gain the most from free market policies that foster innovation and competitiveness.. 6. Conclusion In conclusion, the cultural norms of the country in which eBay operates have a significant impact on the level of success that eBay has achieved as an entrepreneurial venture. In order to develop regulations that stimulate new business efforts, both business owners and legislators need to have

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a deep understanding with a society's defining cultural values, attitudes, and habits. These statistics are essential for the development of sound public policy. Before eBay can be successful in that region, the company needs to demonstrate that it can accommodate local customs. The company will not be successful if its strategy is not modified to accommodate the local market as well as the social and regulatory environment. It is essential for the continued development of global internet markets like eBay that people respect the cultural norms and practices of one another(Smith, A, 2020). 7. References  Smith, A., & Johnson, M. (2020). Examining the Evolution of eBay: A Comparative Analysis of E-commerce Platforms. Harvard Business Review , 97(4), 65-74.  Wilson, L., & Thompson, R. (2021). eBay: The Rise of Online Auctions. Harvard Business Press.  eBay Inc. (2022). Annual Report 2022.  eBay. (2023). About eBay. Retrieved June 15, 2023, from https://www.ebayinc.com/company/