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1) Some of the diversification options from a corporate perspective include merger, acquisition, spinning off/selling a product line, licensing, joint venture or a new equity investment. Let us focus on the diversification options and discuss these options as it applies to your Glo-Bus company and discuss the paths that you would consider in the fifth year of business. Do not get involved in legal detail, but examine the options as it pertains to your company. Develop a recommendation for your company and comment on the strategy of your competitors.

2)i) Choose ten stocks in S&P 500 index.

ii) Collect five years of monthly data on these stocks (YAHOO FINANCE, for ex)

iii) find out the means, standard deviations, and correlations of monthly returns using Excel.

iv) find out the mean and standard deviation of and equally weighted portfolio of these ten stocks.

v) find out the alphas, betas of these stocks.

vi) Compare the performance of the equally weighted portfolio with each of the individual stock by comparing the alphas and the Sharpe Ratios.

Basic Finance, Finance

  • Category:- Basic Finance
  • Reference No.:- M914949

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