Here is the synopsis of our sample research paper on Financial Questions. Have the paper e-mailed to you 24/7/365.
Essay / Research Paper Abstract
This 5 page paper is written in two parts, the first part answers the question "Can the market portfolio be beaten by holding a given number of securities that have the highest Betas?", the second looks at a company which has diversified operations, and takes the income from different activities to determine the real level of diversification. The bibliography cites 8 sources.
Page Count:
5 pages (~225 words per page)
File: TS14_TEsainemh.rtf
Buy This Term Paper »
Unformatted sample text from the term paper:
the market a range of theories have been developed in order to try and find a way of beating the market. One tool that is used by many investors to
rank the risk and potential reward is the beta. This is calculated by reference to the volatility of the share and its performance and indicates the level of risk compared
to the risk free investments. For example, a beta of 2 will mean that there is 2 times the risk as with a risk free investment, 3, means there is
3 times the risk (Vaitilingham, 2001). Where an investment is held with all share having high risk betas this may be seen as a much higher risk profile, and as
such both the risk and the potential reward will be greater. However, to look a if there is the potential to use
this methodology we can consider the way in which the stock market is seen to behave and how this operates over a portfolio of shares. Here we can look at
the efficient market hypothesis. This is a controversial theory, but it argues the market is so efficient that it cannot be outperformed by selecting favoured shares. This is a theory
that was developed for the most part at the University of Chicago, the theory is both a stand alone theory as well as forming an integral part of more complex
ideas, such as Modern Portfolio Theory (Freeman, 2001). The basic idea is that it is not possible to beat market prices as
the prices will already include the relevant market information (Fama, 1965, 1991). The theory is both controversial and disputed. Those who support the hypothesis state they believe it is useless
...