...Formula Sheet for Investment Analysis 1. Buying on Margin. Margin Percentage = (market value of assets purchased minus amount of loan) / (market value of assets purchased) MP = ((shares * price) – loan) / (shares * price) 2. Going Short. Margin Percentage = ((cash from short sale + collateral) – (shares borrowed * market price)) / (shares borrowed * market price) MP = ((shares * price) + T-Bills) – (shares * price)) / (shares borrowed * price) 3. Net Asset Value. NAV = (market value of assets – fund liabilities) / # of shares outstanding. 4. Return on a Mutual Fund. ($1 * (1-load)) * (1+(r-f)) r = return on fund f = fees. load = front-end load for A share; otherwise load = 0. 5. One Risky Asset and One Risk-Free Asset. E(rc) = rf + y * (E(rp) -- rf). σc = y * σp. 6. Optimal y to Maximize Utility. y* = (E(rp) -- rf) / (A σp2) 7. Single-Factor Model statistics. ri = E(ri) + βim + ei , and m and ei are uncorrelated. σi2 = βi2 σm2 + σ2 (ei) . Cov (ri , rj) = βi βj σm2 . Corr (ri , rj) = (βi βj σm2) / (σi σi) . 8. Single-Index Model statistics. Ri (t) = αi + βi RM (t) + ei (t), M and ei are uncorrelated. σi2 = βi2 σM2 + σ2 (ei) . Cov (ri , rj) = βi βj σM2 . Corr (ri , rj) = (βi βj σM2) / (σi σj) . 9. R2 for Single-Index...
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...Following is a likely solution for Mr.Chintamani. Genarally as a thumb rule 1.exposure to equity and/or M.F. should be (100 minus age)% of investable amount (after expenses if any) 2.Sum assured for insurance should be aproximately 10 times of annual expenses. So in this case the Sum assured should not be less than Rs.20,00,000/- present premiums of term insurance of sum assured 20 lacs. are for a male of 1. 25 years old is around Rs.2500 p.a. 2.35 years old is around Rs.3500 p.a. Making same premium amounts for health insurance would earn a health cover of Rs.2-3lacs. for him. @25 years TOTAL INVESTABLE AMOUNT after insurance expenses (50000-2500-2500)=Rs.45000p.a. investment term (55-25)=30years equity and/or M.F exposure (100-25)=75% Allocating 37.5% into equity and 37.5% into M.F. Equity amount to be invested 37.5%*45000= Rs.16875 Using compound interest formula for equal installments. A=P*({1+r}^n-1)/r r=rate of return. n= number of years. P=annual investment amount. A=total amount at end of "n" years. For equity n=30,r=0.15,P=16875. A=16875*({1+0.15}^30)/0.15 A=Rs.7,33,63,324 ............a * risk factor=16875/50000*100*5=168.75 Similarly for M.F. n-30,r=.12,P=16875. A=Rs.40,72,489................b * risk factor=16875/50000*100*4=135 Now amout that is left out of investable 45000 is 11250. equally allocating 11250 amongst bank f.d and gold means 5625. Gold ...
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...The Contribution of Government to Rural Investment: A Case Study in Matara Divisional Secretarial area. INTRODUCTION CHAPTER CPM: 9680 Introduction 1.1 Introduction This research is mainly focusing on, whether the government contribution is at a satisfactory level regarding the rural people Investment. Previously conducted researches found that there is a positive relationship between Income and investment in Formal Institutions, and negative relationship between Income and investments in Informal Institutions. In today?s Sri Lankan context there is a high possibility of rural people in tend to informal investment sources rather than the formal sources of Investment. There are several factors affecting to this situation...
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...Beta Management Company | | |Investment Management case study | Table of contents Backgrounds……………………………………………………….……1 Strategies………………………………………………………………...1 Background of California R.E.I.T and Brown Group Inc……………2 Return and risk…………………………………………………….....…2 Summary………………………………………………………………...4 Appendix………………………………………………………………...5 Background: Beta Management Company is a small investment management company based in a Boston suburb founded in 1988. As the company developed, they had roughly 25 million dollars in the 1991. The goal of the company is to enhance returns but reduce risks for clients via market timing. Currently, the company’s funds were invested into the Vanguard 500, an S&P 500 no-load and low-expense index funds (with the reminder in money market instruments). As time goes by, Sarah Wolfe who is the founder of this company think about increasing her equity exposure to 80% with the purchase of individual stock. Strategies: Firstly, Sarah Wolfe uses a market timing strategy based on two portfolios: the Vanguard Index and money market. In order to obtain the capital gains, once the company predicts the market value will rise, it will transfer its assets from the money market to the Index. The limit will up to a maximum 99% of total assets. On the other hand when the company expects the market value will decrease, it...
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...World Dialogue on Regulation for Network Economies Regulation and Investment: Case study of Bangladesh Harsha de Silva[1] and Abu Saeed Khan[2] August 2004 Abstract The paper considers the available evidence in determining a relationship, if any, in the Telecom Regulatory Environment [TRE] of Bangladesh and investments in to its telecommunications industry over the last decade. TRE is segmented in to market entry, access to scarce resources, interconnection, tariff regulation and regulation of anti-competitive practices while investments are all non-divestiture foreign and domestic private and public investment. The TRE in Bangladesh is found to be wanting in all defined aspects. Interconnection is the worst of the five components, where a mobile only parallel network is being created due to regulatory ineffectiveness where almost ninety percent of mobile users do not have access to a fixed phone. Investments in to the fixed sector in Bangladesh dominated by the state owned virtual monopoly have been sorely inadequate and continue to be dictated by the funds availability [or lack thereof] of the Government. The mobile sector on the other hand has seen some amount of investments flowing in led by the widely acclaimed GrameenPhone. However, once standardized to compare across the region, it is found, even though using imperfect data to compare, that the reason for this flow could...
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...Introduction Dimensional Fund Advisors, further referred to as DFA, is an investment company that bases its strategy mainly on academic research and related theories. They work together with proponents of the efficient market hypothesis, indicating a relatively strong belief in this theory and thus in efficient markets. However DFA also feels that skilled traders have the ability to contribute to a fund’s profits even when the investment is inherently passive and DFA does adjusts its strategy to new findings in the field. In this report we will evaluate the relevance and accuracy of the theories used by DFA, especially the value premium and the size premium where almost all of their funds are based upon. This will lead to comments on the usefulness of these theories to increase the return of DFA’s funds and to recommendations about changes in strategy that will enhance the performance of DFA overall. Performance and strategy so far DFA has performed relatively well over the years, aside from some relatively rough patches in the late 1990s. Growth of the company had been stable and profits high. There was no need to sell shares for liquidity reasons and shares were only sold if they did not fit into a fund anymore. This didn’t happen very often though as DFA had several funds that were “connected”, when a stock in the Micro Cap portfolio grew too big it could be placed into a fund with bigger companies (Small Cap portfolio). An important part of DFA’s strategy,...
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...World Dialogue on Regulation for Network Economies Regulation and Investment: Case study of Bangladesh Harsha de Silva and Abu Saeed Khan August 2004 Abstract The paper considers the available evidence in determining a relationship, if any, in the Telecom Regulatory Environment [TRE] of Bangladesh and investments in to its telecommunications industry over the last decade. TRE is segmented in to market entry, access to scarce resources, interconnection, tariff regulation and regulation of anti-competitive practices while investments are all non-divestiture foreign and domestic private and public investment. The TRE in Bangladesh is found to be wanting in all defined aspects. Interconnection is the worst of the five components, where a mobile only parallel network is being created due to regulatory ineffectiveness where almost ninety percent of mobile users do not have access to a fixed phone. Investments in to the fixed sector in Bangladesh dominated by the state owned virtual monopoly have been sorely inadequate and continue to be dictated by the funds availability [or lack thereof] of the Government. The mobile sector on the other hand has seen some amount of investments flowing in led by the widely acclaimed GrameenPhone. However, once standardized to compare across the region, it is found, even though using imperfect data to compare, that the reason for this flow could be the rub off of the attractiveness of the region and not necessarily...
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...INTRODUCTION 1.1 BACKGROUND OF THE STUDY Foreign direct investment refers to an investment made by an entity or a company based in a country, into another entity or company that is based in different country. FDI is an investment made to acquire a lasting management interest (normally 10 percent of voting stock) in a business enterprise operating in a country other than that of the investor defined according to residency World Bank (1996). The importance of FDI to developing countries cannot be over stated, it acts as a complement to their locally assembled savings it is accompanied with managerial skills and technology which are key in the development of any economy. A number of studies inspired by Chenery and Syrquin (1975), Ranis (1976),...
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...Kyle Stocker FIN-421 4/7/2014 Rudy Wong: Investment Advisor Rudy Wong, an investment advisor at O’Hagan Securities was in a predicament that caught him in the middle of his clients and the stock market crash of September 2008. In the United States, the Dow Jones Industrial Average had stooped to its lowest level as well as the Toronto Stock Exchange since 2003. This financial crisis led four of Wong’s clients to request urgent meetings regarding their assets and investments. All four were of different gender, age and particular needs which left Wong concerned that they all hold a risk of losing everything. He had to decide the best way to reassure all of his clients by communicating logical arguments based on their portfolios and his expertise, managing their emotions and attempting to re-establish their faith in the market despite its current situation. Wong knew that the outcome of his decisions had a great impact on his professional credibility and the interests of his clients who entrusted their life savings to Wong and O’Hagan Securities. As an investment advisor, it is Wong’s duty to help clients to optimize the allocation of their financial assets that meet the client’s particular needs. He does so by taking into account each clients financial resources and constraints as well as their short and long term goals. They are considered all purpose financial counselors who show the client how they can save money on mortgage payments, their child’s college fund, the...
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...Questions (Please limit all answers to a 150-word maximum. Point form answers are also accepted) What has driven your desire to take part in the Queen’s Real Estate Investment Conference? As a student interested in pursuing a career in finance, I believe it is important to gain exposure to the Canadian real estate market, as it is one of the largest sectors in the Canadian economy. The Queen’s Real Estate Investment Conference provides a unique opportunity to learn from industry professionals about investing in real estate, an experience I would benefit greatly from. I am excited to learn more about the Canadian real estate market, and I believe QRIC provides the unique opportunity to learn about real estate from an investor’s perspective....
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...Week 5 Case Study HSM 544 Healthcare Industry The American health care industry is one of the nation's largest and most profitable industries (Healthcare, 2011). The American healthcare industry "has consistently increased its share of GDP from only 7.2% in 1970 to more than 16.0% in 2008" and that figure is still growing (Van Horn, 2010). It is also one of the few American industries that is expected to grow in the next few decades. In fact, the healthcare industry in America is expected to generate 3.2 million new jobs through the year 2018, which is more than any other American industry (Healthcare, 2011). This industry includes everything "from small-town private practices of physicians who employ only one medical assistant to busy inner-city hospitals that provide thousands of diverse jobs" (Healthcare, 2011). It includes things such as doctors' offices, phlebotomy laboratories, research laboratories, outpatient care centers, nursing homes, residential care facilities, clinics of all sizes, and large hospitals (Healthcare, 2011). It is not only a large industry, but a very broad one with many potential investment opportunities and many potential risks. Government and Healthcare The role of government in the healthcare industry is a topic that leads to very active and divisive debate. People are either of greater government involvement or deeply opposed to any government involvement. Currently, healthcare remains an industry with a high degree of regulation, in terms...
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...Case study: Investment Analysis and Lockheed Tri Star MGMTS-2700 Professor Hamza Abdurezak Harvard University Yang Zhon 1> A. Payback, NPV, IRR, Should purchase or not? Payback: $35,000/5000=7 year NPV: =Co+ C1…..n/(1+i)^1….n Co=-3,5000 CF1-CF15= 5,000; I= 12 Computing result is $-945.67 IRR: 11.49% NPV is negative and IRR is lower 12% so reject the proposal. B. NPV: =Co+ C1…..n/(1+i)^1….n NPV= -35000+(4500/.12) =2500 NPV is positive so should purchase the machine. C. NPV: =Co+ C1…..n/(1+i)^1….n = -35,000(4000/(0.12-0.04)) =-35,000+50,000 =15,000 NPV is positive so rainbow should reinvest the cost saving into the machine annually. 2. Cash Flow: Investment Y1 Y2 Y3 IRR NPV@15% 1. -75k44k44k44k34.63% 25,461.91 2. -50k23k23k23k18.01% 2,514.18 3. -125k70k70k 70k 31.21%34,825.76 4. - 1k12k13k14k1207.06%28,469.88 5. -125k67k67k 67k28.10% 27,976.08 1,Using IRR I recommend the (4) 2, Using NPV I recommend the proposal (3) 3,NPV is better! The NPV method is better because it shows the most cash flow as the highest. Because the discount rate is 15%, it is building a new both is prioritized higher. 4. 1, NPV=PV-Investment =210k-110k=100k 2. Assuming issue N shares when price is P. N*P=110,000(1) P=1,210,000/(10,000+N) (2) Then computing the result So N=1000 P=$110 3, Stock price rises up $10 Stock holder make the profit. Out cash flow in cash flownet cash flow 1967-100-100 1968-200-200 1969-200-200 1970-200140...
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...I. What is Foreign direct investment Foreign direct investment as known as FDI is an investment made by a corporation or individual from other country, the foreign investor will have ownership or controlling interest in the business. “Foreign direct investment” (FDI) takes place when a corporation in one country establishes a business operation in another country” (Moran, 2012) II. Why choose this study? Since 1978 Chinese government has announced new policy of reform and opening Chinese economic, Chinese government has offered lots of new policy to attract foreign investors, different provinces have different policy but attract more foreign direct investment is a basic state policy. The government has adopted a series of policy measures...
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...Federal Retirement Thrift Investment Board The Federal Retirement Thrift Investment Board administers the Thrift Savings Plan (TSP), a tax-deferred defined contribution plan similar to private sector 401(k) plans which provides Federal employees the opportunity to save for additional retirement security. (frtib.gov). The Federal Retirement Thrift Investment Board (FRTIB) manages over 4 ½ million asset accounts for members of the military, federal government employees, and their beneficiaries. The FRTIB’s mission is to administer the TSP solely in the interest of participants and beneficiaries. The FRTIB is managed by five board members who are appointed by the President and confirmed by the Senate. At the present time the board members are Michael Kennedy, Dana Bilyeu, Ron McCray, David Jones, and...
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...Impact of Nigeria's Bilateral Investment Agreements in Oil and Gas on the Right to Health and the Right to a Healthy Environment: A Case Study of the Niger Delta” Full Name of Student (Your student registration number) A XXXXXXXXXXX DISSERTATION SUBMITTED IN PARTIAL FULFILMENT FOR THE REQUIREMENT OF DEGREE OF XXXXXXXXX XXXXXXXXXXXXXXXXXXXXXXXXXXXXX UNIVERITY Declaration I hereby declare that research thesis is my original work and has never been used presented for any degree or diploma in any university or institution. Where material is obtained from published or unpublished works, this has been fully acknowledged by citation in the main text and inclusion in the list of references. Table of Contents Declaration 2 Table of Contents 3 CHAPTER ONE: INTRODUCTION 11 1.1 Background of the study 11 1.2 Statement of the Problem 27 1.2 Research Aims 29 1.3 Research Objectives 30 1.4 Research Questions 31 1.5 Justification of the Research 32 1.6 Research Methodology 42 1.6.2 Research design 45 1.6.2 Target population 45 1.6.3 Sampling 46 1.6.4 Data collection 46 1.6.5 Data presentation 46 1.7 Definition of terms 46 1.8.2 Environment 47 1.8.3 The right to health and the right to a healthy environment...
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