Finance risk management Written assignment -( 3000 words), 100% of total marks Scenario: The stock markets have a lot to offer but investing in stocks is a risky business. There are some risks you have some control over and others that you can only guard against. Many avoid investing in stocks, however, because they are afraid of the many associated risks. News about the occasional market recession or slump doesnt help matters. All of that may be true, but investors should frame their decisions by knowing the potential financial risks. You are required to prepare a (3000-word report ) where you will both identify and theoretically and critically explain the main financial risks that are associated with stock market investment 3 (which relate to the Interest rate risk, market risk, credit risk, off-balance-sheet risk, foreign exchange risk, country or sovereign risk, technology risk). To begin your work, you open a Web browser and go to http://finance.yahoo.com. Enter the symbol of the stock of your choice; here the stock is Coca-Cola CO. Find out what the beta of this stock( coca cola Co) is if it is being released. It can be found under the Key Statistics page under trading information. If you are interested in calculating Beta yourself, then you will: Click on Historical data (on the bottom of where you see last trading data. Choose monthly data (close price) - for at least 60 periods- at least 5 years. Download the data in spreadsheet format and save it in an Excel file. Then, to collect data for the market - choose the NYSE index that measure the volatility of the market, NYSE is the market in which the Coca cola Company is chosen for trading, Steps to follow:

Go to yahoo finance again

Choose the index, NYSE. Historical data Choose monthly data-the same period as the one that you choose for the stock Coca-cola Co

Historical data Choose monthly data-the same period as the one that you choose for the stock Coca-cola Co

Download it in spreadsheet format Save the data in an Excel file Now you have two sets of data, one for the market (i.e. DJIA), and the other one is for the stock of your choice (close price). Use two sets of data; calculate the percentage change in price of your stock and percentage change in market index. Run a regression (dependent variable Y is the stock, independent variable- X is market changes), make sure to have the intercept checked to zero. You only need the coefficient of X, which is your beta. Y= X Coefficient of the regression equation is Beta. After the calculation of beta, explain the beta and critically discuss the general approach to valuing a share of stock and the associated risks to that share. Also, refer to situations of potential increase/decrease of the value of the stock market.

Written assignment -( 3000 words), 100% of total marks Scenario: The stock markets have a lot to offer but investing in stocks is a risky business. There are some risks you have some control over and others that you can only guard against. Many avoid investing in stocks, however, because they are afraid of the many associated risks. News about the occasional market recession or slump doesnt help matters. All of that may be true, but investors should frame their decisions by knowing the potential financial risks. You are required to prepare a (3000-word report ) where you will both identify and theoretically and critically explain the main financial risks that are associated with stock market investment (which relate to the Interest rate risk, market risk, credit risk, off-balance-sheet risk, foreign exchange risk, country or sovereign risk, technology risk).

To begin your work, you open a Web browser and go to http://finance.yahoo.com. Enter the symbol of the stock of your choice; here the stock is Coca-Cola CO. Find out what the beta of this stock( coca cola Co) is if it is being released. It can be found under the Key Statistics page under trading information. If you are interested in calculating Beta yourself, then you will:

Click on Historical data (on the bottom of where you see last trading data.

Choose monthly data (close price) - for at least 60 periods- at least 5 years.

Download the data in spreadsheet format and save it in an Excel file.

Then, to collect data for the market

- choose the NYSE index that measure the volatility of the market, NYSE is the market in which the Coca cola Company is chosen for trading, Steps to follow:

Go to yahoo finance again Choose the index, NYSE.

Historical data

Choose monthly data-the same period as the one that you choose for the stock Coca-cola Co

Download it in spreadsheet format Save the data in an Excel file Now you have two sets of data, one for the market (i.e. NYSE), and the other one is for the stock of your choice (close price). Use two sets of data; calculate the percentage change in price of your stock and percentage change in market index. Run a regression (dependent variable Y is the stock, independent variable- X is market changes), make sure to have the intercept checked to zero. You only need the coefficient of X, which is your beta. Y= X Coefficient of the regression equation is Beta. After the calculation of beta, explain the beta and critically discuss the general approach to valuing a share of stock and the associated risks to that share. Also, refer to situations of potential increase/decrease of the value of the stock market.

Task 1 Theoretically discuss the main risks that businesses and banks are facing in a financial setting with reference to the chosen stock (coca cola). To achieve :

. You should write a report that discusses theoretically the main financial risks that banks and business are facing. Examples should also be presented along with a logical evaluation. .You should also choose a stock and explain the importance of choice and provide some background information for the stocks development.

Task 2. Calculation of the beta and errors of the valuation process -Reference to the Gordon growth model As part of your report, you should choose a stock by following the instructions above and collect data regarding it and calculate the beta. To achieve: Assume you are about to apply for the role the financial analyst in a company and evaluation of stocks for investment purposes along with evaluating the financial environment is part of your job. Therefore, calculation of the beta for the chosen stock along with comparison with the industry and analysis of the stock by using the Gordon growth model should be essential.

Task 3 Evaluate the measures that were proposed to balance or control financial risks for a potential investor for the chosen stock. As part of your report, you should now review your own potential as a prospective investment analysist. To achieve : Assume you are about propose the chosen stock to one of your clients or provide information to your company regarding the financial environment that they operate. Identifying risks is not enough without proposal of managing those risks. Therefore, financial risk-management techniques and measures should be discussed and proposed with reference to the chosen stock.