Money Banking and Finance Assessment

Added on - 12 Nov 2020

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Money Banking andFinance Assessment
Table of ContentsINTRODUCTION...........................................................................................................................1MAIN BODY..................................................................................................................................1QUESTION 1...................................................................................................................................1QUESTION 2...................................................................................................................................1QUESTION 3...................................................................................................................................2QUESTION 4...................................................................................................................................4CONCLUSION.............................................................................................................................6REFERENCES................................................................................................................................7
INTRODUCTIONMoney banking consists of the credit that banks extend their deposits. Translations madeusing checks drawn on deposits held at banks includes the use of bank money. To manage thefinance is important so that higher returns can be generated and it is beneficial for the growth.Banks are the financial institution who manage the money and also control the activities whichare associated with it. In this report, there are following topics are covered such as: to produce aset of minimum variance & efficient portfolios with & without shorting selling by using 20stocks, investment objectives and policy and analyse risk and return performance against anappropriate benchmark. Apart from this it discuss about long and short portfolio constructionstechniques, motivation to control interest rate, inflation targeting, foreign currency derivatives &swaps and currency forward agreement.MAIN BODYQUESTION 1Effective portfolio: Effective portfolio is that which involves the different number ofassets and they are combine together with effective combination which minimize the chances ofrisk. The factors which have high risk they are not taken so that chances of looseness can bereduce.Risk and return: The risk is involved in the every business and if a person takes more riskthan there are chances of higher return. Without risk there is no return and risk is assumed to bemeasurable by the variability around the expected value of the probability distribution of return.Two risky assets portfolio: It is that portfolio in which more risk because of lack ofanalysis. The degree to which a two-risky-assets portfolio reduces variance of returns depends onthe degree of correlation between the returns of the securities.Efficient frontier: The possible of assets combination in which risk and return are plottedand the line along the upper edge of this area can be called efficient frontier (Chauhan, 2015).QUESTION 2An investment objective in regards to financial planning is the reason behind investing. Itdefines how mutual fund invests its portfolio. Depending on the risk appetite of investor, thereare three main objective of investment: safety, growth and income.1
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