Risk and Return Tradeoff Memo

Risk and Return Tradeoff Memo - Risk and Return 1 Risk and...

Info iconThis preview shows pages 1–3. Sign up to view the full content.

View Full Document Right Arrow Icon
Risk and Return Risk and Return Tradeoff Memo INVESTMENT FUNDAMENTALS AND PORTFOLIO MANAGEMENT FIN/402 December 15th, 2008 Introduction 1
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Risk and Return When constructing an investment portfolio two of the most important concerns are risk and return. An investor must be able to generate adequate returns from investment activities to make the effort worth their while but the investor is at the same time going to try and minimize the risks of their investments so as not to lose large portions of their account value. To this end as the treasury analyst for Casa Bonita Ceramics, I have analyzed the market securities that are available for investment with the companies’ surplus cash and come to the following conclusions regarding the path the firm should take with its investment capital. Securities Analysis First we know that we have eight hundred thousand dollars to work with and that there are eight different possible securities to invest in, but we need to narrow this short list to four securities so that we can focus our efforts and investments. After calculating and graphing the stocks in terms of expected risk and return we can quickly see four of these securities that stand out above the rest. That is because each of these stocks shows higher returns than others of similar risk. These stocks are Desktop Inc., Levinthal Defense Systems, Transconduit Inc., and Goldstein and Delaney Bank. These stocks also make a strong portfolio because they are each in different industries and are unlikely to have a serious devaluation of the entire
Background image of page 2
Image of page 3
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 08/17/2011 for the course BUS 200 taught by Professor Torres during the Spring '11 term at University of Phoenix.

Page1 / 6

Risk and Return Tradeoff Memo - Risk and Return 1 Risk and...

This preview shows document pages 1 - 3. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online