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OF INTERNATIONAL STUDIES Question 3. (5 marks) Suppose you are an investment consultant. You have produced below analysis of the key financial ratios of 5

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OF INTERNATIONAL STUDIES Question 3. (5 marks) Suppose you are an investment consultant. You have produced below analysis of the key financial ratios of 5 companies. Alibaba Zoom Video Merck & Starbucks Group Communications, Co., Inc. Corporation Caterpillar Holding Inc. (ZM) (MRK) (SBUX) Inc. (CAT) Limited Average return 1.95 0.18 0.54 0.61 0.31 Jensen's Alpha 1187 0.01 0.10 0.26 0.07 Beta 0.20 0.47 1.12 0.89 0.60 R-squared 010 0.24 0.67 0.41 0.18 Based on the above analysis, please advise your client which of these companies he/she needs to invest as the first choice. Which company he/she must not invest Clearly explain your client the reasoning behind your advice. Explain the limitations of your analysis

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