How does Harvard’s new policy portfolio weights compare to historical weights and other university endowments? 7. Do these differences reduce or increase risk? 8. Are there asset classes that should be excluded or others that should be included?
(Points : 1) Answer: An investment that can change quickly without warning 5. Which of the following would not be part of an investment portfolio? (Select the best answer.) (Points : 1) Answer: A savings 529 plan 6. When is your risk tolerance lowest?
W1 Application Problems (Questions 1,2,3,4,5 and Brief Exercises 1-2, 1-3, 1-4, and 1-5) W2-7 Application Problems Final Exam What is the difference between financial accounting and managerial accounting? Explain the two reasons why the shorter the payback period the more attractive the investment is when the payback technique is used? Distinguish between a master budget and a sales forecast. Explain the nature and importance of a job cost sheet. Distinguish among operating, investing, and financing activities.
When there is an x for y stock split then you should calculate returns as r_t=(〖x/y P〗_t-P_(t-1)+〖x/y D〗_t)/P_(t-1) For example, in the case of a 5 for 4 stock split x/y=1.25. 2. You do not have data on debt returns for the comparable companies. A common rule of thumb that is used in practice is to assume that the debt of these companies is risk free (has a beta of zero). This is a good assumption when debt represents a fairly small fraction of the firm’s value.
(0.5 points) the amount of risk you can handle. What are debt investments? (0.5 points) non promised investments What are equity investments? (0.5 points) more promised investments Lesson 3 (3.0 points) What are stocks? (0.5 points) an investment where you get a share from the ownership/stock.
However, according to the research, the average bid-ask spread is huge in the callable government bond market, the callable bonds are somewhat illiquid. Tax consideration For investors who need to pay for the tax, they need to keep adjusting their position continuously. For a long-term arbitrage portfolio, it is hard to manage the risk for the adjustment. Cost of short selling and repurchase agreement Short selling and repo certainly have risk and transaction cost (broker fee and initial margin). But for investors who own the callable bonds, costs of repo and short selling don’t exist.
What is debt services default? (0.5 points) The failure to make payment 4. What is the Better Business Bureau? (0.5 points) An organization that reports on the reliability and ethics of companies and other organzations. 5.
(0.5 points) Credit is a commitment to pay for something in the future, instead of paying for it right away 2. What is a credit score? (0.5 points) Your credit score is a number that tells lenders how likely you are to make payments on time. 3. What is installment credit?
The direct method is relies on changing the contractual characteristics of Asset and Liabilities to reach a particular duration and maturity gap to get over any Asset and Liability mismatch. On other hand the synthetic method relies on using derivatives such as interest rate swaps, future, options and other customized instruments like AIRS. Since the direct method is not always possible using the synthetic method give higher degree of flexibility to Asset –Liability management process. Banc one can use the following financial instruments ( off –balance sheet) to hedge against interest rate risk : • Futures : is an agreement between buyer and seller to exchange a specific amount of financial products at a specific price in a specific future date. The management must be very careful to follow the regulatory and the accounting rules that govern the use of future contract.
Financiering 6012B0217 Financiering Case 2012/2013 Vraag 1 a) Excel regression (ongecorrigeerde beta) equity beta van ING: 1.972874 ASML: 1,002967 Ahold: 0,395736 b) We know that there is a linear relationship between the stock beta and its expected return. So, if there is fewer stock the security market line will be steeper so, the beta will be smaller. Vraag 2 ßu = ßa= (E/(D+E)) x ße Net debt: Interest Bearing Debt – Cash and Cash Equivalents ING: 47284/(1234038+47284) x 1,972874 = 0,07280 Debt: 1247110-13072=1234038 ASML: 2773908/(1456616+2773908) x 1,002967 = 0,65763 Debt: 3406450-1949834=1456616 Ahold: 5910/(6215+5910) x 0,395736 = 0,192891 Debt: 8815-2600=6215 Vraag 3 a) ASML has a higher asset beta because it participates in an market which develops faster, so it has a higher systematic risk. Ahold has a lot of more diversity on his business. Ahold can better spread his risk.