Portfolio Theory of Mutual Funds and Nave Investment - Term Paper Example

They are guardians of these funds and have a responsibility to invest these funds in a way that yields the highest possible return and at the same time providing liquidity to an organization.... They are guardians of these funds and have a responsibility to invest these funds in a way that yields the highest possible return and at the same time providing liquidity to an organization.... If a price of a commodity or an investment is rising, it is better that the financial manager move his funds or resources to that investment and make capital gains by selling those investments when the market has peaked or the investment prices start falling....

Name: Professor: Course: Date: Part 1 Question 1   a) Current ratio = Current assets/ Current liabilities $14,651,000 / $19,539,000 = 0.... 5times Quick ratio = (Current assets – Inventory)/ Current liabilities ($14,651,000 - 6,136,000) / $19,539,000 = 0.... 4times Total asset turn over = (Sales/ Total assets) $167,310,000 / $108,615,000 = 1....

Hedge funds and Luck Often the investors of a hedge fund are confused between luck and skill.... Hedge funds and Insider Trading The agency theory is often applicable in case of hedge funds where the fund managers act as the agents of the investors.... However, a retail investor cannot invest in the hedge fund the same way as he would have done it for stocks or mutual funds.... Hedge Funds Introduction Hedge Funds are a particular kind for investment instruments in the form of collective investment in which the investors may invest capital in a speculatively manner in order to get more return than what the markets would otherwise offer....

This makes it possible to develop a theory of portfolio optimization.... Thus utility theory lies at the heart of modern portfolio theory.... Every rational investor wants to invest money in an investment which will give him more money.... But the question arises how can one make choice between a set of investments There are number of theories regarding how an investor view risk and prefers one investment over the other ones. … Standard deviation, represented by the lowercase form of the Greek letter sigma, is a statistic that tells you how tightly the data points are clustered around the mean for a given process, which in turn tells you how much variation exists....

Then came the theory of absolute advantage; according to Adam Smith countries should export goods in which they have an absolute advantage and import other goods from countries that have an absolute advantage in producing them i.... nbsp;Adam Smith's absolute advantage theory of international trade does not take into consideration that some countries may also simply lack the absolute advantage because they may not have the technology that provides them with an edge over another country and cannot, therefore, compete with other companies in the global market and benefit from any free trade economy....

The emerging markets of China, India and Indonesia are particularly attractive to foreign investors. Many of the plausible explanations for the growth in overseas investment and much of the background to the economic analysis presented here has been spurred by the growth of multinational companies.... Equally tariff barriers to trade can encourage direct investment, but non-tariff barriers are also important.... Many services are not exportable in any direct sense and have to be delivered in the overseas market through direct investment....

Therefore there are no specific investment In case of dividend if the income is received or accumulated it is given a credit @ 10%.... These are also known as Income Protection Insurance (IPI).... (Income Payment Protection Insurance) These are simply based on profit and “loss basis of the… There is no specific coverage....

Thus, as part of the Portfolio Theory directives, I decided to purchase stocks/ETF/mutual funds from Hyperdynamics Corp (HDY), CNET, SinoCoking & Coke Chemical Industries Inc.... Based on the portfolio theory, it is clear that the combination of assets that are not closely tied in terms of on and depreciation allows investors to limit the risks they expose their investments to provided that different industries are affected differently by economic factors.... This section of the report seeks to provide details meriting my investment strategies in purchasing stocks of Hyperdynamics Corp (HDY), CNET, SinoCoking & Coke Chemical Industries Inc....