Case questions with solutions for ‘Alex Sharpe’s Portfolio’ Abhijit Nandi P301413CMG286 Aniket Saha P301413CMG AdityaGanti P301413CMG Devesh Joshi P301413CMG Mallikarjun Swami P301413CMG324 Management Of Risk ( RSK 611) Term 5 ( MBA – Finance & Banking ) Batch 6 Case questions with solutions for ‘Alex Sharpe’s Portfolio’ 1. Estimate and compare the returns and variability (i.e. annual standard deviation over the past five years) of Reynolds and Hasbro
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SHARPE’S PORTFOLIO THEORY This model was developed by William Sharpe. According to Sharp’s model‚ the theory estimates the expected return and variance of indices which may be one or more and are related to economic activity. This theory has come to be known as Market Model. Sharpe’s single index model will reduce the market related risk and maximize the returns for a given level of risk. Sharpe’s model will take into consideration the total risk of portfolio. The total risk consists of both
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Portfolio Management Case 1: Alex Sharpe’s Portfolio Executive Summary As Alex Sharpe’s consultant‚ we recommend a portfolio of 78% S&P 500 and 22% of R.J Reynolds. This portfolio will generate an annual expected return of 8.86% (significantly higher than the index return 6.29%)‚ while the risk increases by only less than 10%. In Qualitative Analysis‚ we find that tobacco industry tends to move with the market less than the toy industry‚ which indicates that R.J Reynolds can diversity the
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Chapter 15 Homework Solutions 2. During Christmastime‚ when the public’s holdings of currency increase‚ what defensive open market operations typically occur? An increase in currency holdings causes the currency ratio to rise and the money multiplier to fall. As a result‚ there will be a decrease in the money supply. To maintain the money supply‚ the Fed must make a defensive purchase of bonds on the open market‚ raising the monetary base to counter the decline in the multiplier. 6. “The
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Alex Sharpe Assignment – T. Jabran Answer 1. By comparing both the stocks‚ the riskiest stock in this case is Reynolds. It has the highest return as well as higher standard deviation and the higher variance. If we compare both stocks‚ Reynolds is riskier than Hasbro in this case. The higher variance indicates higher chance that the actual return on Reynolds will deviate from the expected return. S&P 500 REYNOLDS HASBRO Mean/Average 0.574333 1.874833 1.183833 Variance 12.972333 87.730541 65
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Linguistic Ethology- Alex the Parrot Despite the claims made by Dr. Pepperberg Alex the Parrot does not have the ability to understand and comprehend human language. The reasoning behind this statement is because of Alex’s training‚ Dr. Pepperberg’s attachment to Alex‚ and no proof of combining phrases. When watching the video entitled Nova Science Now: Irene Pepperberg & Alex‚ at the 5:33 point of the video Dr. Pepperberg created the model/rival technique. The technique involves a student doing
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Glass (Product group supervisor) Landon Care Products. Issues troubling Sam Glass: Alex Sander – Product Manager is a highly talented individual and has been very effective employee and has delivered results but when it comes to handling people Alex doesn’t seem to fit into the role. Sam has high regards for Alex and is keenly interested in keeping Alex at Landon but at the same time also understands that Alex lacks leadership skills especially with respect to people handling aspect. It might have
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take you back to when and where this all started. A. November 2004‚ Alex and his dad were in a major car accident. The other people in the other car survived the accident ok. B. Alex’s dad survived the accident‚ but Alex had major injuries. C. Alex’s vertebra was detached from his head‚ and he remained in a coma for the next two months. III. Body Paragraph #2: For those 2 months he was in the coma‚ young Alex visited heaven. He met God‚ Jesus‚ angels‚ and even the devil. A
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and Hasbro with that of the S&P 500 Index. Which stock appears to be riskiest? 2) Suppose Sharpe’s position had been 99 per cent of equity funds invested in the S&P 500 and either one per cent in Reynolds or one per cent in Hasbro. Estimate the resulting portfolio position. How does each stock affect the variability of the equity investment? How does this relate to your answer in question 1 above? (sharpe’s position) 3) Perform a regression of each stock’s monthly returns on the Index returns to
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efficient portfolio------------------------------------------------------------------------------------- | 09-19 | LETTER OF TRANSMITTAL P LETTER OF TRANSMITTAL P November 22‚ 2012 Pallabi Siddiqua Assistant Professor Department of Finance University of Dhaka Dhaka Dear Madam‚ It is an honor and great pleasure for me to present my report on “Efficient Portfolio Construction”
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