Corporate Finance Essay Example | Topics and Well Written Essays - 1000 words

Corporate Finance - Essay Example I agree to this because diversification spreads the risk over the different types of assets. Given the fact that the two assets are uncorrelated to each other, it would be rational to invest in both assets. The higher risk of asset S will be compensated with the less risky return of asset B. 2. I totally disagree to the statement; it is quite opposite of the fact that there is a direct relationship between correlation of the portfolio assets and its risk. The higher the correlation between the portfolio assets, the more chances will be that the downside movement of one asset will accompany the same in the other and thus the investment will turned to be the worst. Thus, a rational investor should invest in uncorrelated or atleast less correlated assets in order to reduce the overall risk of the portfolio (Ross et. al, 2013). 3. I agree to this argument. Since the expected return of portfolio is the weighted average of the expected returns of the individual assets, it must lie in betwe en the range of these two individual expected returns. . However, the standard deviation of the return on portfolio doesn’t need to be in b/w the individual standard deviations of the two assets, especially when the stocks are uncorrelated, because the standard deviation of a portfolio is not just the weighted average of individual standard deviations but is computed using the standard deviation formula to the return on portfolio assets rather than just the returns for one asset... al, 2013). 4. I agree to this statement. When capital market consists of all risky assets, a rational investor should hold large number of assets in portfolio in order to diversify risks to a large extent. Risk diversified over the large number of stocks will tend to reduce the portfolio risk more significantly because a large portfolio tends to behave more like the market portfolio which compensates unsystematic risks (Ross et. al, 2013). 5. I agree to this statement. The variance of the return on a portfolio is function of both the component variances of the individual assets as well as co-variances among the assets’ returns (Ross et. al, 2013). That is, even if the individual variances of the assets are very low though their returns are highly correlated, the portfolio will be highly volatile and risky and there won’t be any advantage of such diversification. 6. I disagree. Although increasing the number of assets reduces the variance of portfolio return because of d iversification, the reduction in risk occurs at a diminishing rate (not at a constant rate) with the increase in number of assets in the portfolio. It is even said that to attain the maximum benefits of diversification, 10-15 assets are enough for a portfolio since this amount of diversified assets can resemble the market portfolio. Adding more assets won’t contribute to any further reduction in the portfolio risk. So, the variance will be more or less same but won’t be zero even when N is very large. Also, it’s not just the added number of assets which reduces the portfolio variance but the correlation between the assets does that too. Theoretically, a mix of negatively and positively correlated assets or a mix of uncorrelated

Race and Gender Essay Example | Topics and Well Written Essays - 2500 words

Race and Gender - Essay Example It starts by a guy (Han-Ki) spotting a young lady (Sun-Hwa) sited on a bench across the street and decides to sit beside her. His constant glare towards her makes her uncomfortable and she sees it as rude. She moves away from her and runs to greet her boyfriend. The man grabs her and forcefully kisses her, the witnessing soldiers intervene beats up this guy. She demands an apology, but the guy remains adamant. It leads to her spitting on him, introducing the hidden desire for obsession and vengeance in motion. It is revealed later that the impetuous, quiet gangster is a pimp. Later, the young girl in the street is implicated in a cash theft which lands her in a brothel. It would be unwise to assume that the theme of Bad Guy is about revenge; the plot revolves around the escapades between captor and captive and the director Kim seems not to be arriving at a particular theme. The beguilingly and controversial climax of the film leaves viewers with hard questions to ponder. Therefore, Bad Guy can be termed as an enigmatic piece of work displaying the common issues affecting the society inclusive of race and gender themes. Kim Ki-duk is known as one of the prolific directors in Korea. He is majorly recognized as a remarkable movie producer outside Korea with his movies receiving a number of international awards. For example, the film Samaritan Girl (2004) has gotten him a prestigious international award for best director in the Silver Bear awards. It is fascinating that despite Kim Ki-duk’s international identification as a leading movie director in Korea, back in South Korea his reputation is mixed with many controversies. He has many discontented detractors and a small flock of enthusiastic supporters. He is well reckoned for his unreserved and painterly images. However, many movie critics are displeased by his use of gruesome, shocking, voyeuristic, violent and bizarre images, inclusive of his