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Posted: March 3rd, 2022
Return and Risk (100 points)
Complete the following problems:
Problem #1:
You are the investment consultant for a Saudi Arabian hospital to assess the risk for its future investments.
There are three potential opportunities:
Investing in Clinic A, or Clinic B or Clinic C.
They have the following probabilities with regard to their return on investment:
What is the expected return for each clinic?
Calculate the standard deviation of return for each clinic?
If the hospital is risk averse, which clinic would you recommend?
If the hospital wants the highest, return which clinic would you recommend?
If the hospital wants a good return but with a medium level of risk, which clinic would you recommend?
Problem #2:
The hospital invests in several Mutual Funds
Calculate the required rate of return for each fund.
Problem #3:
Mutual Fund D is made up of the following stocks
Based on this data calculate the portfolio’s return and Beta
Problem #4:
You are provided with the following information about a portfolio
Calculate the required rate of return for portfolio using CAPM
You must show all your calculations for credit. Your calculations for this assignment must be submitted as an Excel file.
Present your findings in a paper 4-5 pages in length excluding the cover, the reference page, and the excel spreadsheet for Problems #1-4.
Be sure to include:
Summary of findings.
Analysis of the acceptable level of risk for each scenario.
Your paper should meet the following structural requirements:
Four-to-five pages in length, not including the cover sheet and reference page.
You must show all your calculations for credit. Your calculations for this assignment must be submitted as an Excel file, identified as Appendix A, and included as part of the Word document submission.
Formatted according to APA 7th edition and Saudi Electronic University writing standards
Provide support for your statements with in-text citations from a minimum of four scholarly articles. Two of these sources may be from the class readings, textbook, or lectures, but the other two must be external. The Saudi Digital Library is a good place to find these references.
You are strongly encouraged to submit all assignments to the Turnitin Originality Check prior to submitting them to your instructor for grading. If you are unsure how to submit an assignment to the Originality Check tool, review the Turnitin Originality Check Student Guide.
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