portfolio

Learning Goal: I’m working on a finance multi-part question and need an explanation and answer to help me learn.

.1. Compare the relative liquidity characteristics of direct versus indirect investment in real estate. Discuss three factors that affect the liquidity of both forms of investment.

Q.2. Ian Parkinson, as chief pension officer of a large defined-benefit plan, is considering presenting a recommendation that the pension plan make its first investments in three different types of hedge funds: 1) market neutral, 2) convertible arbitrage, and 3) global macro.

 

An analyst who works for Parkinson comes by with the table given below and makes the following comment: “The returns for global macro are very impressive. In fact, there are other strategies that have significantly outperformed the S&P 500, equity market-neutral, and convertible arbitrage over the past 15 years. I think that, based on their returns, we should focus specifically on the other strategies.”

A. Describe the three alternative strategies that Parkinson is considering, and evaluate each with respect to their level of market risk and credit risk. Interpret their correlations with the S&P 500 and the Lehman Government/Corporate Bond indices as presented in the table above.

B. Critique the analyst’s statement.

Q.3. Discuss the construction and interpretation of benchmarks, including biases, in alternative investment groups.

 

Q.4. Roger Guidry, CIO of a university endowment fund, is reviewing investment data related to the endowment’s investment in energy commodities.

A. Calculate the roll yield for Year 1.
B. Calculate the collateral yield for Year 2.

Guidry notes that the collateral yield is positive in both scenarios, although the GSCI total annual return for Year 2 is -30.5 percent. He asks for an explanation with regard to the positive collateral yield.

C. Justify the positive collateral yield by discussing the concepts of margin and implied yield.

A consultant tells Guidry: “Commodities exhibit positive event risk.”

D. Justify the consultant’s statement by discussing the relationship between commodity prices and event risk.

attachment_1
attachment_2
Calculate your order
Pages (275 words)
Standard price: $0.00
Client Reviews
4.9
Sitejabber
4.6
Trustpilot
4.8
Our Guarantees
100% Confidentiality
Information about customers is confidential and never disclosed to third parties.
Original Writing
We complete all papers from scratch. You can get a plagiarism report.
Timely Delivery
No missed deadlines – 97% of assignments are completed in time.
Money Back
If you're confident that a writer didn't follow your order details, ask for a refund.

Calculate the price of your order

You will get a personal manager and a discount.
We'll send you the first draft for approval by at
Total price:
$0.00
Power up Your Academic Success with the
Team of Professionals. We’ve Got Your Back.
Power up Your Study Success with Experts We’ve Got Your Back.