Question
it will require selection of 3 firms with each sector/industry analyzed to invest $10,000,000 of a special portfolio into both stocks and bonds evenly. The
it will require selection of 3 firms with each sector/industry analyzed to invest $10,000,000 of a special portfolio into both stocks and bonds evenly. The objective of the portfolio is to produce superior returns to those of the S&P 500 over the next 12 months. Therefore, given the economic environment, the sector sensitivity and performance expected, 3 firms will need to be selected per industry that will outperform their sector. Requirements In order to meet all the requirements for the financial analysis exercise #3, you are required to complete the following tasks: Select stocks and bonds to purchase based on sector and industry analysis Use 3 methods to calculate relative value of stocks: dividend discount, Gordon model and P/E or other approved method. Obtain the consensus earnings forecast for the firms Explain how this will affect the expected future price Obtain a consensus interest rate forecast How will this effect bond prices? How will this affect the roll down the yield curve?
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