Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:a. Portfolio; feasible set; efficient portfolio; efficient frontier

Q: Create a classification of investment chart to distinguish between simple and nonsimple investment?

A:

Q: Define then discuss Value-at-Risk.

A: The stock market is full of new policies and procedures. It get impacted by change in the government…

Q: Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:…

A: Characteristic lineIt a line that is helpful in summarizing specific security that helps in…

Q: Briefly describe the connection and the difference between CAPM and Single Index Model (SIM).

A: Capital Asset Pricing Model or CAPM referred to as the relationship between the systematic risk and…

Q: What is Scenario Analysis?

A: Scenario analysis is an important step in the financial modelling. This is used to show the possible…

Q: Set up an illustrative probability distribution for an investment

A:

Q: What reinvestment rate assumptions are built into the NPV, IRR, and MIRR methods? Givean explanation…

A: It is a method under capital budgeting which includes the calculation of net present value of the…

Q: Select a project on the basis of PPB and IRR with a mathematical example.

A: IRR Annual growth rate of growth that is estimated to be generated from an investment.

Q: Explain the types of investment risks with practical examples.

A: Investment risk - Investment risk is the probability of incurring losses from an investment made in…

Q: What is a yield curve, and what information would you need todraw this curve?

A: Yield curve: It could be a line plotting bond yields (coupon rates) of comparative credit quality…

Q: Describe sensitivity analysis? Give an example?

A: Sensitivity Analysis:The process to evaluate the effect of change in one variable on the end result…

Q: What techniques can be used to analyze real options?

A: A choice accessible to the organization's managers related to the investment opportunities is known…

Q: Describe the assumptions underlying CVP analysis?

A: Cost-Volume-Profit Analysis (CVP Analysis): CVP Analysis is a tool of cost accounting that measures…

Q: find The internal rate of return (IRR) for this case in exceland equation.

A: Internal rate of return(IRR) is the rate at which the the initial cost of project is equal to…

Q: Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:…

A: APT                                                                              It is a model based…

Q: Explain replicating portfolio

A: A pool comprising of various stocks, financial assets, currencies, and bonds, closed or mutual funds…

Q: Draw a graph showing the feasible set of risky assets, the efficientfrontier, the risk-free asset,…

A: To sketch the graph showing the feasible set of risky assets, the efficient frontier, the risk-free…

Q: What is meant by volatility clustering? Briefly describe two models that areused to describe data…

A: When the large changes in financial asset prices are bundled together that further leads to results…

Q: Explain Target Return on Investment?

A: Investments are done to get the return on the same. Generally, investments are done when an…

Q: What is the concept behind the EOQ model?

A: Economic Order Quantity (EOQ) Model: It is a method of inventory costing that aims to identify the…

Q: What can be understood from active portfolio?

A: There are two strategies or approaches which can be used in management of portfolios which are…

Q: Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:…

A: c) The model indicating the relation of the market risk and the required stock returns is known as…

Q: With the aid of appropriate diagram, explain the three main categories of attitude towards risk and…

A: The three main categories of attitude towards risk are: Risk averse Risk neutral Risk seeking

Q: Calculate NPV and IRR of this proposal project using MS Excel.

A: Capital budgeting is the process of evaluating and selecting long-term investments that are in…

Q: If you wanted to evaluate a firm’s DSO, with what could you compare it?

A: DSO is the number of days that firms take to convert their account receivables into cash.

Q: What are the primary benefits of using Excel portfolio optimization analysis? How would you optimize…

A: There are many advantages of excel portfolio optimization which are as follows:  1. maximizing…

Q: Define scenario analysis

A: Scenario means a situation or circumstance which is influenced by various factors. Various if and…

Q: Identify some different types of real options and differentiateamong them.

A: Real Options are rights which enable  a manager to take a decision regarding business operations…

Q: Give two examples of where a vertical analysis would be useful to investors.

A: Vertical analysis of financial statement entails listing each line item in a financial statement as…

Q: Describe some of the investment strategies?

A: Investors always select investment strategies according to their suitability. Investors have…

Q: Outline the rules for identifying the optimal transfer price.

A: Transfer pricing:- Transfer pricing is considered as the value that is attached to those goods and…

Q: Describe the procedure to obtain the best-case NPW with scenario analysis?

A: Scenario analysis is a technique to break down and survey potential events that may happen later on…

Q: Define each of the following terms: e. Sensitivity analysis; scenario analysis; Monte Carlo…

A: Sensitivity Analysis is a tool used in financial modeling to analyze how the different values of a…

Q: Explain real options

A: Introduction: Options are one of the derivative contracts which involve two parties, contract buyer…

Q: a. Are there Nash equilibria? If so, determine how many and state which strategies.

A: Yes, there are Nash equilibrium.

Q: Discuss the main and major difference between single index model and Markowitz optimization model.

A: The Single Index Model is an asset pricing model in which the returns on security can be interpreted…

Q: What is the project's NPV?

A: Net Present Value: It represents the measure of the profitability of a project or investment in…

Q: Q1- What is a probability impact matrix? Q2- how to make a risk assessment matrix? Q3- how to use…

A: Probability impact matrix is 2 dimensional graphic risk assessment tool based on chances on…

Q: Define conditional value at risk (CVaR)

A: The question is based on the concept of conditional value at risk , it is a risk assessment process.…

Q: What is the difference between smart beta ETFS and index ETFS?

A: Smart beta exchange traded funds (ETFS) is a systematic approach which gives the advantage of active…

Q: Define efficient portfolio

A: Portfolio refer as an investment in a group of financial assets such as stocks, bonds and any other…

Q: Define value at risk (VaR)

A: Risk is referred as uncertainty or loss. Financial risk is referred as the variability of actual…

Q: which of the following tabs in PORT allow you to view your portfolio's overall current performance…

A: Answer is given in next step.

Q: Calculate the value of a call option.

A: Call Option: A call option provides the buyer the right to exercise the option and benefit from the…

Portfolio Management

Portfolio management is the process by which an investor decides that how the person will invest in a variety of assets in order to get a desired return in the future. A portfolio means a pool of assets that includes securities, bonds, and other investment instruments which helps in risk minimization of the money that has been invested. In other words, it can be said that a portfolio means a combination of assets in which an investor decides to invest their money in order to get a lump sum return in the future or even a series of cash flow that the person is expecting at the end of their job life.