Description
the total word count of this assignment is 2200 (but you can go 10%higher so max 2420 words)
answer the following questions:
Critically discuss Portfolio Theory and explain the CAPM. The discussion must include assumptions and shortcomings of the capital asset pricing model and possible alternatives. (15 marks)
Select a company listed on the FTSE100 : I have chosen Marks & Spencer. Present a short summary of its business, with focus on its financial profitability ratios and strategy for future growth. You could for example show the company’s EPS growth over the last 5 years and compare their EPS and P/E with similar companies or the industry average. Is the company diversified? What are their risk levels as measured by their beta? Identify and show all securities issued by the company, show how profitable they have been to investors (Holding Period Returns on bond and equity over the last 6 months) and make recommendations as to whether this company is a better or worse investment of similar companies in the same industry. To gain a good mark in this section you need to research as much as possible about the company, including their latest annual report and any news/reports from reliable sources. Please include graphs/tables (clearly labelled with data source) as visual aids.(25 marks)
Critically discuss the impact of interest rates on foreign exchange markets. In your response, elaborate on the concepts of Covered Interest Parity and Uncovered Interest Parity. Additionally, compare and contrast the conditions that govern these two interest rate parities.(20 marks)
Critically discuss the Black-Sholes model to value options. Clearly explain all assumptions.(30 marks)
Present your report in a suitable format: Include a cover page (with module title and code, assignment title and word count), page numbers, table of content, executive summary, explicit headings. A reference list is optional and only if you reference/quote external sources (e.g. academic/ newspaper articles, textbooks). The report should be clearly written in academic English, the use of any business/scientific jargon clearly explained. Formatting Guidelines: font size 12, text alignment: justify, line spacing: 1.5. (10 marks for presentation)
questions 2,3,4 hold the most value of marks so write more in each of these questions.
in terms of references use up to 12 references.
