Briefly discuss the focus of the investment decision, the financing decision, and the working capital and short-term operating decisions and how these decisions are interrelated with each other.
The expected return and risk of the portfolio are two of the most important measures of attractiveness. Precisely & completely explain how the expected return and standard deviation of the returns on the portfolio are determined. (Please use words in your explanation as well as formulas).
The question wants you to discuss the investment decision, the financing decision, and the working capital and short-term operating decision and, their interrelationship. Then it requires you to give one formula of the expected return on investment and standard deviation.
<br>There are several assumptions which the question makes first it assumes that the decision on investment, finance, working capital and short-term operating decisions are related to the same company, this is not supported by evidence. Often there is a competition for investment for funds and investment from sources which are outside the company. For instance often funds in high demand are invested in the holding company. Second, it ...