Portfolio risk management Essay Example | Topics and Well Written Essays - 2500 words

Portfolio risk management - Essay Example tfolio analysis studies the performance of different portfolios under different circumstances (Reilly & Brown 2011).Portfolios can be grouped according to industries, countries or sector. Each group consists of sub-unit. For example, the financial sector can be made up of several banks or the Airline industry can be made up of several airline companies. The analysis of each portfolio helps an investor in making a decision when investing. Most likely, a rational investor will choose the best portfolio and screen out the ones that are not essential based on objective criteria. A good portfolio is characterized by high returns on investment (Reilly & Brown 2011). Portfolio analysis requires subjective judgment as it is not easy to segment different industries. Portfolio analysis is a process as different financial instruments have to be evaluated one by one. The process is time consuming and involves a lot of effort. In spite of these odds, Markowitz the fonder of modern portfolio analy sis has simplified the process by suggesting use of expected return and variance (Brigham & Houston 2009). In this report, we will discuss four steps of constructing a portfolio. Q 1.a Construction of a portfolio The portfolio we are to construct consists of IBM and Shell Gas shares using weekly data from 2007 to 2012. A good portfolio is characterized by high returns and moderate risk. It is also well diversified just like in our case where we have IBM and Shell Gas shares. The first step in constructing a portfolio is an assessment of your expectations and attitude towards risk. Basically, there are two types of investors, the aggressive investor and the conservative investor. An aggressive investor is willing to take more risks by devoting larger portions to equity and less to bond and other fixed income securities. On the contrary, the conservative investor takes less risk as his main goal is to protect the value. On the other hand, an aggressive investor aims at maximizing retu rns by accepting more risk. A moderately good portfolio is one which satisfies the tolerance of average risks, attracts all those people who are willing to take in more risks in their portfolios in order to help them in the achievement of a balance of capital growth and income. Therefore, as an investor you should be in a position of knowing the category where you suit. The second step is choosing the portfolio. In our case, we consider the individual shares that have high returns and have the outperformed the FTSE 250 mid-cap index (FTMC). The portfolio will have 21 shares. Below is the portfolio f our choice: After choosing the portfolio, the next step is to identify, risk and return. In identifying risk and return, we use mean-variance analysis which was derived by Markowitz in 1952. Markowitz (2000) suggests that a portfolio with the lowest level of risk is to be

Contracted Dining Research Paper Example | Topics and Well Written Essays - 750 words

Contracted Dining - Research Paper Example They would then be given, in many cases, a usual or average plan (Occidental College). In-house eating offers the best solution for college students to meet there food and meal needs . Discussion Today, there are companies that have become specialized in contracting foodservices to schools and educational institutions. These include Aramark Corporation based in Philadelphia, Sodexo, Inc. based in Gaithersburg, Maryland, and U.S. Foodservice, Inc. based in Rosemont, IL. (Chartwells). The one which services my school (Wentworth xxxx), is Chartwells Educational Dining Services, which operates out of Rye Brook, New York (Chartwells). Off campus dining can normally be expensive, but it depends on the location of the school. For example Cornell University speaks of a place called Collegetown that has a lot of restaurants offering all kinds of food from organic to ethnic (Cornell). And then in Ithaca, New York, there are places where one can get fast foods or go to sit-down restaurants. Off campus eating has the advantage of offering more options to students. Usually one may find special discounts and coupons and promotions. Plus there is the ability offered to be able to find out about an area, to mix the residents and to encounter and enjoy other atmospheres. But then there are certain disadvantages to off-campus eating. These disadvantages have to do with not knowing the area well. Becoming victim to sharpies or even just to crime, or course, can be a problem. Then there is the transportation option, the time involved. Certainly, every student should experience off-campus eating. But one should not base their entire meal plan on it. Most schools have meal plans. They vary in price and most schools seem to offer alternative plans. One school has a program which recognizes three plans of which two average in comparison to other plans and one costs more. Plans have to be gauged according to what the student generally spends, the amount of financial aid, and of course, the costs of the meals including service. The plans can cover a full 30 weeks or arranged over two semesters that are 15 weeks each. The plan at MIT has three levels. One costing $3,800/year includes 7 dinners and breakfasts, or 14 meals per week. The $3,400/year includes only 6 dinners and 6 breakfasts per week for a total of 12 meals per week. It is not open to freshmen. Notice that none of these plans include lunch. The MIT report notes that students all spend in variable amounts for food, and some cook for themselves. The figure for median spending over 30 weeks was $2,100. But this median figure differs widely in its breakdown, going from $2,422 to $3,000. Yet the school itself uses median figures representing the 75th percentile of all student spending. This figure averages from $3,000 to $3,600 covering all undergraduates to the level of students who dine in the house. The officials then base their plan on $2,900 to $3,800. (All figures from MIT report covering 2010-2011 per iod). The MIT lists the expenses of over plans. These are mostly from Ivy League schools and include the following figures. Yale University averages $6,000 for a full plan. Boston college's full residential plan is $4,632 and Boston University is $4,632 for its full residential plan. Harvard University charges $4,606 for its full plan. There are other variables. For example, Cal Tech's figure of $4,956 is buttressed by an