Deliverable Length: Graph plus document of explanantions and posting Details:
At this point, you believe customers are now ready to begin risk analysis and understand the risk differences among various investments. The most basic fact you want to convey to them is risk and return?the greater the risk, the greater the expected return. From there, you want to explain how expected returns can be calculated given the level of risk and outlining which investments are more risky and which are less risky. Create a file for uploading to the Discussion Board which contains all of the following information.
First, graph and explain the risk profile for the following:
Risk Expected Return
Second, given the following two investment options, explain what an investor would choose and why:
? Investment 1, an investment that is guaranteed a 6.5 percent return.
? Investment 2, an investment that has a probability 0.25 of earning 5%, a 0.50 probability of earning 10%, and a 0.25 probability of earning 0%.
Third, explain which of the investments below are riskier and why:
? Corporate stocks
? Corporate bonds
? Treasury bonds
Fourth, for the class of investors below, explain which investment vehicle they are likely to choose based on its risk profile (stock, corporate bond, and Treasury bond):
? A retiree that is looking for a safe investment
? A 28-year-old MBA graduate looking for high returns
? A forty-something professional looking for good investment income
This solution explains how to:
1) Graph and use a risk profile for an investment.
2) Assess which investments to choose based on risk and expected return.
3) Determine the risk factor with stocks, bonds, and treasury bonds.
4) Choose a suitable investment vehicle for an investor.
Acme External Financing Alternatives
Having previously identified the location of its greenfield investment, Acme, a multi-billion dollar public MNE that is incorporated in the U.S., must next obtain external financing for its proposed overseas production facility. It has been estimated that the acquisition will cost $500M and all funds will be secured in the U.S. Your job is to explain to this committee some of the financial aspects of this acquisition.
Deliverable: At the next steering committee meeting, you will provide a detailed presentation of the characteristics of the various external financing alternatives, including the advantages and disadvantages of each. Your report should conclude with a recommendation of which alternative (or combination of alternatives) should be used to finance the overseas investment.View Full Posting Details