238720918 Zeus Asset Management Case Week 5

* A ratio for valuing a stock relative to its own past performance, other companies and the market itself.

Vance, D. E. (2003) states that it is another way to think about the risk of leading to, or investing in a company. These two companies both experienced a drop on this ratio from 2004 to 2005, 0.35 for WOW and 0.3 for CML in 2005.

With Reference to this statement, describe, discuss and illustrate the principles of portfolio theory. Your essay should include coverage of the Markowitz Efficient Frontier and the Capital Market Line.

The goal of this paper is to explain why CCM’s aggressive program is a good alternative to any investor looking to diversify its portfolio. The paper will be divided into three distinct parts: the operational analysis, the quantitative analysis and a comparison against its peers (including the impact of CCM in a traditional portfolio).

4. The various weighted combinations of stocks that create this standard deviations constitute the set of efficient portfolios.

In this case, the Partner’s Treasury Department has computed all the portfolios for minimum level of risk with different types of assets, more specifically, adding Real Estate Investment Trusts (REITs), Commodities or both, from an undefined approach. Since the results are identical as calculated from Mean-Variance Theory, they should be the optimal portfolios for each target level of return. Therefore a graph with efficient frontier, which represents the optimal portfolios with different assets, is constructed based on Exhibit 5 to 8 for comparison. [Appendix B] Technically, any portfolio on the efficient frontier is an optimized portfolio and is indifferent from each other in terms of risk/return trade off.

* Note that the last 5 years, and particularly the most recent year, have been bad for bonds, the asset class that Alpine had been encouraged to hold. Within this asset class, however, Alpine did much better than the index fund. Moreover, despite the fact that the bond index underperformed both the actuarial return and T-bills, Alpine outperformed both. Alpine’s performance within each asset class has been superior on a risk-adjusted basis. Its overall disappointing returns were due to a heavy asset allocation weighting towards bonds, which was the Board’s, not Alpine’s, choice.

Morningstar is an independent investment research and management company. The company specializes in investment ratings that are useful to investors for investment purposes. Morningstar’s analyst ratings have predicted positive fund performance. Predictions are crucial for investment purposes due to pending concrete financial information that obtained through a company’s financial statement. Most investments rely on trends and analytical predictions by highly specialized analyst to make investments for future profitability (Kamal,

The market portfolio consisted of 8 asset classes 1 , in which we used an adjusted allocation size based

RAM’s “risk management” process uses our proprietary Asset Risk Management (“ARM”) technology to identify high risk assets in a mixed portfolio of

Thus, Lipper Growth Index was proved to be an appropriate benchmark for the evaluation of the equity funds.

The comparison can be used for determining investor uncertainty. It allows us to compare the size of the variation of the returns.

with the massive amount of numbers in company financial statements. For example, they can compute the percentage of net profit a company is generating on the funds ithas deployed. All other things remaining the same, a company that earns a higher percentage of profit compared to other companies is a better investment option.

The Portfolio Manager allows the investor to view and track his/her investments on an ongoing basis. It offers a wide variety of portfolio evaluation options: Snapshot, Gain/Loss, Year (High/Low), News & Opinion, Fundamental and Fund Performance.

3> Calculate the daily Company returns, daily Market returns, Expected Return, Actual Return, Abnormal Returns and finally the Cumulative Abnormal Return which is used to make a line chart to test whether a market is efficiency or not.