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Problem Set 6 - Michael Samuels G12358459 Problem Set 1a My...

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Michael Samuels 11/28/06 G12358459 Problem Set 1a. My parents are a very safe family in terms of investing. We own a house, 3 cars, and a few savings accounts. Clearly we have assets, and retirement funds, but no unique investments or risks. My parents got out of the stock market a long time ago, and have no plan to go back in. 1b. BBY – Best Buy Co Share price: 55.69 Market Cap: 26.53B Beta: 1.05 Dividend: .40 BBY has a higher Beta then the Dow and over the last 5 years has grown more then that of the DOW SBUX – Starbucks Share price: 35.68 Market Cap: 26.98 Beta: 1.17 Dividend: N/A SBUX has a much higher Beta then the Dow, and over the last 5 years has done exceptionally well compared to that of the Dow. I have learned that successful stocks typically do better then the Dow, and that you want to find stocks that have a Beta higher then 1.0 1c. Rice farm- Not having the right equipment or specialized workers could be a unique problem. If one does not have the right tools to run the farm, they are taking an extraordinary risk. Higher people who know what they are doing. K-mart Worker - This risk I am taking is that there is not a bright enough future in this position. I have to worry about retirement and raising a family. If I have any desire to do either I would need a better job. Drive 100 Miles – I am risking ruining my car and raise the risk of getting in an accident. I should really find a job that is closer to my home so I do not have to spend so much time driving and I will reduce my unique risk.
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Scranton PA – The only problem here is that you are living in an area that more or less isn’t economical.
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