CMSE11101: An investor has collated nine returns from their portfolio andCalculate the following for each asset class: Advanced Management Accounting Assignment, TUE, UK

Question 1.

a) An investor has collated nine returns from their portfolio. Calculate the following for each asset class; mean, median, mode, variance, and standard deviation. Show your workings and briefly comment on your results

Table 1. Returns in 2022 for Commercial Property, Equities, and Government Bonds

Q1b) Using the information in Table 1, calculate the correlation between Equities and Commercial properties. Comment on the implications of your correlation calculation if you wanted to diversify a portfolio that contained both 50% weight in commercial property and 50% inequities.

Question 2.

Describe and explain how a company can manage working capital? Provide the equation that is used to calculate the net working capital and why it is useful for a company to calculate net working capital? Please give one real-world example of a company managing its working capital.

Question 3.

Critically evaluate the advantages and disadvantages of the Value at Risk (VaR) risk measurement?  Then, compare and contrast the marginal VAR (M-VaR), incremental VaR (I-VAR), and the Component Var (C-VaR).

Question 4.

Describe the concept of arbitrage, and provide an example of when a company has conducted arbitrage in the past.

Question 5.

Consider a stock currently trading at $50. The periodically compounded interest rate is 3%. Suppose that U = 1.3, and D = 0.8. Calculate the value of a two-period European-style put option on the stock that has an exercise price of $50. Also, determine if early exercise would make economic sense.

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