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- Assume that you are a portfolio manager for a large insurance company. The majority of the moneyyou manage is from retired school teachers who depend on the income you earn on their investments. You have invested a significant amount of money in the bonds of a large corporation andhave just received news released by the company’s president explaining that it is unable to meetits current interest obligations because of deteriorating business operations related to increasedinternational competition. The president has a recovery plan that will take at least two years. During that time, the company will not be able to pay interest on the bonds and, she admits, if the plandoes not work, bondholders will probably lose more than half of their money. As a creditor, youcan force the company into immediate bankruptcy and probably get back at least 90 percent of thebondholders’ money. You also know that your decision will cause at least 10,000 people to losetheir jobs if the company ceases…Eric is interested to invest in shares. However, he realizes there would be a risk if he invests in only similar industry. Identify and explain the concept that Eric should apply to encounter this risk.You land a job at a prominent Venture Capital firm. Your job is to think about the value of a new startup you are considering investing in. One thing to consider is how risky this new investment is. Explain how you might think about this risk differently if (a) this is the only startup that you fund, or (b) if you have already invested in many other startups.
- Give typing answer with explanation and conclusion Nelson is faced with a conundrum as a hedge fund manager. He could choose to invest a new client’s wealth in a fairly new and conservative opportunity, but this option has no track record that can be relied on. On the other hand, he could invest it in a copper mine that is seeking capital to expand its infrastructure as there may be a boom in this industry in the near future. From the scenario provided, which key concepts are present? (Exercise caution when answering this question as multiple responses may be correct.) 1. Return 2.Reward 3. Investment 4.Risk 5.UncertaintyAshley is a cautions investor who cares a lot about diversification. Which action she is likely to pursue? Invest entire portfolio into mutual fund Invest entire portfolio into options Invest entire portfolio into REIT Invest entire portfolio into hedge fundLyle considers himself a gambler. He likes to do research on individual stocks, market sectors, and stock market in general, and he likes to buy and sell based on breaking news. Lyle primarily invests in individual stocks and industry-specific mutual funds (i.e., healthcare mutual funds of manufacturing mutual funds). He rarely buys EFT's. What specific advantage of EFT's over mutual fund is Lyle missing out on? Diversified portfolio. Low expense ratios. Ability to buy and sell at anytime during the trading day. Both low expense ratios and the ability to buy and sell at anytime during the trading day.
- Which statement best defines a mutual fund? a. It is a fund set aside by a local government to lend to small firms who want to invest in projects that are beneficial to the firm and community. b. It is an institution that sells stocks and bonds on behalf of small and less known firms who would otherwise have to pay high interest to obtain credit. c. It is an institution that sells shares to the public and uses the proceeds to buy a selection of various types of stocks and bonds. d. It is a financial market where small firms agree to sell and bonds to raise funds.Bill Johnson is a financial analyst working for a futures investment company. Bill's job involves researching and profiling companies to determine if these companies are ideal to invest in on behalf of their clients. Bill discovers that IBN Ltd was about to undertake a $10billion takeover of a rival company called IMF. Bill now knows the exact date that this takeover bid is about to take place, and he knows that he can't disclose this to anyone. But the temptation of making a fortune if someone knew this confidential takeover by IBN is too good to pass. Bill tells Violet to buy shares in IMF right now! But don't tell anyone!!! Violet knows Bill very well, and she knows that Bill is a financial analyst, and he's pretty cool, and he also likes koalas and fast cars. So Violet trusts Bill and buys $5,000.00 worth of shares in the IMF. Violet is happy, and in her excitement, she tells her friends Rupeet and Manjinder to buy shares in IMF right now… but don't tell anyone!!! Rupeet and…D6) Private banking is the provision of wealth management services to high net worth individuals who posses net worth of US $1 million or more. Compare client segments between onshore and offshore private banking.
- As an analyst for a domestic equity–income mutual fund, Robert Ass is evaluating Mosah Water Company (MWC), a publicly traded water utility, for possible inclusion in the approved list of investments. Robert Ass is conducting the analysis in mid-2013. Not all countries have traded water utility stocks. In developed economies such as the United States, about 85 percent of the population gets its water from government entities. A group of investor-owned water utilities, however, also supplies water to the public. With a market capitalization of about GH¢327 million as of mid-2013, MWC is among the ten largest publicly traded water utilities. MWC’s historical base is the Middlesex System, serving residential, industrial, and commercial customers in a well-developed area of central business district. Through various subsidiaries, MWC also provides water and wastewater collection and treatment services to areas of southern sectors. Hampered by a decline in earnings during the recent…As an analyst for a domestic equity–income mutual fund, Robert Ass is evaluating Mosah Water Company (MWC), a publicly traded water utility, for possible inclusion in the approved list of investments. Robert Ass is conducting the analysis in mid-2013. Not all countries have traded water utility stocks. In developed economies such as the United States, about 85 percent of the population gets its water from government entities. A group of investor-owned water utilities, however, also supplies water to the public. With a market capitalization of about GH¢327 million as of mid-2013, MWC is among the ten largest publicly traded water utilities. MWC’s historical base is the Middlesex System, serving residential, industrial, and commercial customers in a well-developed area of central business district. Through various subsidiaries, MWC also provides water and wastewater collection and treatment services to areas of southern sectors. Hampered by a decline in earnings during the recent…Hedge Funds have become an increasingly popular investment options over the past 15 years, with managers making bold statements about the benefits of investingwith hedge funds. List the three main benefits that are claimed to arise when investing in a hedge fund. Do you believe that these benefits exist?