Strategic management Essay Example | Topics and Well Written Essays - 1750 words - 1

Strategic management - Essay Example The lower correlation value of securities in portfolio means lower list. Correlation can vary between -1 to +1. ï  ²(Ri, RM) denotes the correlation between the returns on security i and the returns on the market portfolio; ï  ³(Ri) denotes the standard deviation of the returns on security i, E(RM) denotes the expected return on the market portfolio; ï  ³(RM) denotes the standard deviation of the returns on the market portfolio; and RF denotes the risk-free rate of return. (c) Write down an expression for the security market line. Draw a sketch of the security market line, and indicate the positions of securities A and B on this line. Explain briefly how you would interpret the security market line. The risk free rate of returns is 4%. Beyond that, the higher the risk, higher the returns. In the above Security Market Line, Security A gives 4.5% returns at 10% risk. Security B gives 5.2% returns at 20% risk. The slope of the security market line is the risk(B-Beta). (d) Write down expressions for the characteristic lines for securities A and B. Draw sketches of the characteristic lines for securities A and B. Explain briefly how you would interpret the characteristic lines. The systematic risk is common for all the securities in the market. So, the systematic risk is common for the securities A and C too. The unsystematic risk is unique to each and every security. The risk of Securities A and C are 6% and 11% respectively. The systematic risk has to be less than 6%. Assuming that systematic risk is x %, the unsystematic risk for security A would be 6%-x% and for Security C would be 11%-x%. Since 11%-x% would be greater than 6%-x%, the Security C has higher risk compared to Security A. Roll questioned whether it is even conceptually possible to test the CAPM. Roll showed that the linear relationship which prior researchers had observed in graphs

Tall tales Essay Example | Topics and Well Written Essays - 4000 words

Tall tales - Essay Example cted that there will be similar increase in the demands for the implementation of healthy and natural environment, that is based on green and healthy environment. To maintain equilibrium between the two dominant factors i.e. to mange the concentration of population, and at parallel to cater for their environmental needs the Japanese construction company Takenaka has evolved a design proposal for constructing Sky City 1000, ‘a super high-rise, huge multilevel city with a height of a kilometer’. The design concept of Sky City 1000was introduced in 1989, and the concept has gained worldwide popularity, and many urban developers and planners are looking forward towards the success of the plan, ‘lot of expectations are around, planners are highly optimistic about the success’. As the 21st century is in progress, there are increasing expectations for the implementation and execution of the plan. Sky City 1000 is based on total floor area of 2000 acres, and has an elevation of 1,000 meters, the structure of the Sky City 1000 comprises of 14 concave dish-shaped, aerial bases called Space Plateaus piled one upon the other, and viewed as perfect super high-rise city. The structure has been conceptualized to adjust and support residences, offices, commercial facilities, schools, theaters. The tower has the capacity to offer accommodation to 35000 people, and more than hundred thousand people as employees will perform their respective task. Different systems have been employed by the construction authority to ensure the safety and protection of the city, and in this regard latest security focused technologies have been used to maintain the comfortable state of the city, and offer maximum possible cover to residents. The technology employed by Takenaka has attracted many investors and commercial giants. The concept of Sky City 1000 was launched by Takenaka with the cooperation of Shizuo Harada of ESCO Co Ltd. The Sky City 100 is innovative and modernized version of