GDB NO. 1 SPRING 2013
Ali wants to invest in the stock market while making its total risk zero by creating a unique portfolio. In this mode, he starts from choosing a single stock and adding multiple stocks to this one in order to develop a series of portfolios of his choice. Number of securities range from 1 to 1,000 in the different designed portfolios but he remains unable to get his desired risk level. Despite of rigorous computations, the risk level is still away from zero.
Required:
Can the total risk of portfolio be reduced exactly to zero? Why or why not? Discuss with conceptual rationale.
Important Instructions:
1. Your discussion comments must be based on logical facts.
2. Your comments should be brief and to the point. Avoid unnecessary details.
3. The GDB will remain open for 3 working days / 72 hours.
4. Do not copy or exchange your comments with other students. Two identical / copied comments will be marked Zero (0)
5. Obnoxious or ignoble comments should be strictly avoided.
6. Questions / queries related to the content of the Discussion Board, which may be posted by the students on MDB or via e-mail, will not be replied till the due date is over.
For important helping material related to the subject ( Solved MCQs, Assignments, Short Notes, Solved Past Papers, E-Books, Recommended Books, FAQs, Help & Tutorials , Short Questions Answers & more). You must view all the featured discussion in this subject group.
Required:
Can the total risk of portfolio be reduced exactly to zero? Why or why not? Discuss with conceptual rationale.
Important Instructions:
1. Your discussion comments must be based on logical facts.
2. Your comments should be brief and to the point. Avoid unnecessary details.
3. The GDB will remain open for 3 working days / 72 hours.
4. Do not copy or exchange your comments with other students. Two identical / copied comments will be marked Zero (0)
5. Obnoxious or ignoble comments should be strictly avoided.
6. Questions / queries related to the content of the Discussion Board, which may be posted by the students on MDB or via e-mail, will not be replied till the due date is over.
For important helping material related to the subject ( Solved MCQs, Assignments, Short Notes, Solved Past Papers, E-Books, Recommended Books, FAQs, Help & Tutorials , Short Questions Answers & more). You must view all the featured discussion in this subject group.
GDB
ردحذفQuestion Description
Discussion Question:
Ratios calculated and presented without interpretations are meaningless. However, extreme care is required while interpreting ratios results. Interpretation varies with respect to the industries under study due to which interpreting a situation accurately becomes more difficult.
Consider the following scenarios.
Current ratio of a departmental store is 2 times however its quick ratio is 0.20 times. Interpret (in terms of favorable/unfavorable) its liquidity position along with logic.
The debt ratios of a manufacturing company and a banking company are 0.80 and 0.65 respectively. Interpret the leverage positions for both of the companies.