CORPORATE FINANCE CASE ASSIGNMEN 3 Risk and return, portfolio Essay

CORPORATE FINANCE CASE ASSIGNMEN 3 Risk and return, portfolio diversification and the Capital Asset Pricing Model; The cost of equity - Essay Example It depends on the risk involved in that investment. Hence the investment decision is dependent on the returns, the risk involved (amount of uncertainty in generating the expected returns) and also the investor’s utility indifference (attitude towards risk and expected returns). A risk averse individual will always aim to reduce the risk involved in his investments and ensure a high return. The investor, in light of the level of risk tolerance, must establish specific return objectives. On the basis of these objectives, he/she can opt for a varied portfolio of investments. Diversification is a way to limit or reduce the risk. Diversification is the balancing act in which the risk-return tradeoffs are adjusted. This implies the concept of relativism and indicates that it is superior to that of absolutism (Ware). Owning a number of investments can reduce the risk involved in an investment. This is called portfolio diversification. This could be by owning shares in a number of different countries or by investing in different asset classes such as fixed interest or property (Bekiaris). Investing in a wider range of domestic stocks and cash, short, mid and long-term bonds, foreign currency-denominated bonds, equity sectors, foreign stocks and emerging market sto cks can reduce the risks involved in the investment (Donald). As mentioned earlier, there are three methods that can be used to estimate the rate of return for Federal Express. These include, Dividend Growth, CAPM, and APT. The Dividend growth model is one which requires the current dividend rate, the constant growth rate of the dividend and the required rate of return. Here in this model a summing of the infinite series is done to get the value of the current price. This model also requires a few more details that need to be provided in order to compute the arithmetical calculation. These include the value of ‘g’, the current rate of return‘d’. One of the biggest drawbacks of this

Law Essay Example | Topics and Well Written Essays - 1500 words - 9

Law - Essay Example Project management and using media within his practice is another part of his practice. Generally, the paramedic becomes a highly respected member of the community rather than turn out to be an anonymous person. His work and the speed with which he responds to a call together contribute to the picture of a saviour. The professionalism, the awareness of conforming to the multidisciplinary team and accountability make him what he is in the community (Mulholland, 10th NRHC). â€Å"Rural community engagement, emergency care, scope of extension of practice and primary health care† (RESP) have been included within the job description of a paramedic in the Australian Council of Ambulance Authorities (AAA.). The paramedic makes decisions of life and death under stress. However his practice does not only include only medical decisions (Steer, 2007). Culture, law and ethics problems infiltrate it creating impromptu problems which need to be solved under extreme pressure. Consent for adopting an intervention would depend on the patient. Refusal of care is a major problem that can stop him in his tracks (Steer, 2007). The paramedic must expect these and act shrewdly if he is to save that patient. His skillful application of the necessary rules or laws should smoothen the process. The patient could be in an inebriated state which can be interpreted as incompetence for giving consent. The situation can be explained and the possible reasons for the wheeze which has occurred. The outcomes too may be related. If the person does not still provide valid legal consent, the paramedic is facing the â€Å"Recipe of Difficulty†. He can enquire if the wheeze had occurred earlier and whether it is a habitual event. I f so, the patient may have the necessary medicines or inhaler with him to overcome the wheeze, the cause of which could be just bronchial asthma, and he may not have taken them when he was seen. The paramedic can encourage him to take the medicine or inhale