Explain modern quantitative methodology-portfolio selection
Explain modern quantitative methodology for portfolio selection.
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In 1952 Markowitz Harry Markowitz was the first who propose a modern quantitative methodology for portfolio selection. It needed knowledge of assets’ volatilities and the correlation among assets. The concept was extremely elegant, resulting in novel ideas such as ‘efficiency’ and ‘market portfolios.’ In this concept Modern Portfolio Theory, Markowitz illustrated that combinations of assets could have good properties than any single assets.
XYZ Company is planning to acquire a machine which will cost $200,000, that will last for 4 years. The company employs straight-line depreciation. The tax rate of XYZ is 35% and the proper discount rate in this situation is 12%. (A
Sometimes, companies accuse investors of performing credit sales which they make their quotations fall. Is it true?
Real gross domestic product: If GDP of a particular year is estimated or evaluated on the basis of the base year prices it is termed as real gross domestic product.
AB Corp. is in the business of making white-board markers. They are computing the potential of investing in some new equipment that will enhance their manufacturing process. The initial cost of the latest machinery is $470,000 plus a one-time installation cost o
Calculated betas give different information if they are acquired by using weekly, monthly or daily data.
Baldwin Corporation is planning to expand into the business of providing on-demand movies. Baldwin has debt-to-equity ratio of .25, its pretax cost of debt is 9%, and its marginal tax rate is 40%. The Harrington Corporation is already in the on-demand movie business,
The reasonable thing to perform is to finance current assets that are collections and inventories etc. with short-term debt and fixed assets along with long-term debt. Is it correct?
Explain the way of estimating an average.
Which of these two ways is better: discounting the Free Cash Flow or discounting the Equity Cash Flow?
My investment bank told me that beta given by Bloomberg incorporates the illiquidity risk and small cap premium since Bloomberg does well-known Bloomberg adjustment formula. Is it true?
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