Introduction to financial modelling Assignment Example | Topics and Well Written Essays - 3500 words

Introduction to financial modelling - Assignment Example From figure 3 below, it is clear that, as the volatility for Standard & Poor’s (S&P) SMALL CAP 600 Index increases, the average rate of return declines rapidly up to a point where, if the volatility level continues to increase, the average returns start to increase rapidly (Lachance, 2003). In effect, when this portfolio is less volatile, its average return tends to decline, but when the rate of volatility is very high, the average returns tend to increase. In situations of high volatility, the risk of a stock tends to be high while on the other hand, when a stock is less volatile, its return is almost assured and hence less risky. The characteristic exhibited by this portfolio is that an investor should expect to make more returns when the stock is highly volatile. As such this stock is suitable for those investors who are comfortable with highly volatile stocks, who invest with the expectation of getting high returns. Considering that I am a risk averse investor, and would prefer stocks with more stable incomes even if it means lower returns - I would not go for this stock (Merton, 1969). From figure 4 below, the pattern of the graph has an implication that higher returns are expected in situations of less volatility. This is precisely the type of portfolio that suits my risk profile because I can invest in conditions of low volatility and still expect some returns albeit low. This also shows that this index performed better, as it is less volatile and hence almost guaranteeing investors some returns. The chance of getting returns from the S&P portfolio is very uncertain and hence considered as having performed poorly on such grounds (Milevsky, 1998). If I invested in equal amount in the above two portfolios, I could have formed a diversified investment, which could have balanced my risk with return. The S & P portfolio is more risky, but attracts higher returns while the New

Absolutism Essay Example | Topics and Well Written Essays - 1500 words

Absolutism - Essay Example wn on enlightened classes of those societies away from the Catholic Church and towards more individualistic and personal, as well as more direct forms of relating with God. The Reformation would then enliven and attract the Spanish and the French to religious participation, which would then in the proceeding age be used to control and to subjugate those populations via measures to impose discipline under the guise of religious activity. This would then pave the way for monarchies being facilitated in their drive to consolidate power and to stifle opposition from different factions of French and Spanish societies, having also endeavored to subjugate the religious hierarchies to the power of the monarchies (Pearson, 2010; Pearson, 2010b; Pearson, 2010c). The two courts emphasized grandeur and the projection of the power of the monarchy through architecture, through the patronage of the artistic outputs and the products of their culture, and through a projection of monarchical power via the attempt to grow their respective territories. Both emphasized for instance the grandeur of their bases of power, Philip II in El Escorial and Louis XIV in Versailles. Both also conducted their office with machinations designed to further strengthen their hold on power and to perpetuate their rule over the other stakeholders in their respective societies ((Pearson, 2010; Soylent Communications, 2014; PBS, 2014). One can say that it was the work of Frederick William in being able to consolidate power in Prussia and in being able to project and grow the power of Prussia over its neighbors in Europe, to transform the territory into a truly great European power, that allowed Frederick the Great, who basically inherited his father’s work and its fruits, to rule Prussia in an effective manner. Without his father it is doubtful that Frederick the Great would have been able to do his work unimpeded by the obstacles that his father had cleared for him, when it was his father’s turn to