Thursday, December 12, 2019
Managing Finance for Monthly Market Returns -myassignmenthelp
Question: Discuss about theManaging Finance for Monthly Market Returns. Answer: Daily market returns, monthly market returns and yearly market returns: Average Daily returns 0.07% Average Monthly average 1.46% Average Yearly returns 18.69% Total risk: Average Yearly standard deviation 1.24% Systematic risk: Beta 0.83 Unsystematic risk: Unsystematic risk 0.0107 Providing relevant suggestion: Depicting the basis of selection of this stock as good investment: The overall calculation is mainly conducted for ABM industries, where all the relevant return, risk and unsystematic risk are identified for the stock. This mainly helps in depicting the overall viability of the stock to provide higher returns from investment. The overall unsystematic risk and return of the sock is relatively adequate in terms of investment. The unsystematic risk is at 0.0107, while the yearly average returns are at 18.29%, which depicts viability of the overall investments. Marshall (2015) mentioned that overall evaluation of the unsystematic risk mainly allows investor to identify the risk from external forces such as government and regularities, which might hamper their returns. Depicting the reason behind investing all the money in stock or not: From the overall valuation of the calculation the investment scope within ABM industries could be identified. However, the investment in the company needs to be limited, as it has a higher beta of 0.83, which indicate the high risk involved in investment. However, the company is providing a average return of 18.69% on yearly basis, which might help in improving the overall return from investments. Therefore, investments of around 35% of the total investment value could be conducted with adequate diversification for reducing the risk from investment. In this contest, Pizzutilo (2015) mentioned that with the help of diversification method investors are mainly able reduce the overall risk from investment. Reference: Marshall, C.M., 2015. Isolating the systematic and unsystematic components of a single stocks (or portfolios) standard deviation.Applied Economics,47(1), pp.1-11. Pizzutilo, F., 2015. Isolating the systematic and unsystematic components of a single stocks (or portfolios) standard deviation: a comment.Applied Economics,47(58), pp.6277-6283.