Answered step by step
Verified Expert Solution
Question
1 Approved Answer
you are a wealth manager and have the ability to invest in the following stocks. each stock has an expected return for the next year.
you are a wealth manager and have the ability to invest in the following stocks. each stock has an expected return for the next year. each company, based on the value of the company, is classified as large, medium, or small cap company. Company, Expected return, Cap type (1 large, 2 medium, 3 small): Vianet 7.50% 2 Agritek 8.60% 1 Akamai 7.90% 3 Baidu 6.10% 1 Blucora 5.20% 1 Boingo 8% 3 Brainy Brawn 1.20% 3 Carbonite 3.50% 3 Finance online 3.80% 2 ChitrChatr 7.60% 1 Crexendo 7.10% 1 Endexx 6.50% 3 Envestnet 6.60% 3 Liberty power 7% 2 FlashZero 5.80% 2 Facebook 4.70% 2 Genesis 9.10% 1 IAC 2.30% 3 Internap 6.70% 1 Ipass 5.80% 3 J2 global 4.70% 3 a client comes to you and wants to maximize their return for this year. she has $500,000 in which to invest. she has specific requirements to which she wants you to adhere. she wants no more of 25% of her portfolio to include small cap companies and no less that 60% of her portfolio in large cap companies. as diversifaction is important, she requires that one stock cannot be more than 25% of her portfolio a) based on this information where should you invest her money? b) how much would the return be if youe client had $40,000 more to invest? explain. c) if you could invest more money in any one stock, without changing the small cap or large cap requirements, which one would you choose and why? d) your client read in the financial times that large cap companies are the best investment. she wants to increase the requirement in large cap companies to 65%. what effect will this have on the return to her portfolio
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started