Business Finance
FIN 288 Upper Iowa University Wk 3 Individual Asset Allocation Case Study

Fin 288

Upper Iowa University

FIN

Question Description

I need help with a Economics question. All explanations and answers will be used to help me learn.

The Week 3 Case Study Assignment is the second part of a series of analytical tasks, spanning several weeks. Your task involves an analysis of general economic conditions or systematic risk, i.e., the risk that affects all industries and companies, in the U.S. macroeconomy. Your goal is to determine in percentage terms an optimal allocation of $1,000,000 among the following three asset classes: U.S. equities, U.S. Treasury bonds, and cash.

The goal is to maximize your expected return over the next 12 months.

Write a 1- to 2-page paper providing your analysis of the asset classes' prospects and your justification of your allocation of monies among them.

In Week 3, submit your analysis of U.S. Treasury bonds. Keep in mind that the purpose of your analysis is to determine how much money to allocate to each class.

Student has agreed that all tutoring, explanations, and answers provided by the tutor will be used to help in the learning process and in accordance with Studypool's honor code & terms of service.

Final Answer

Attached.

Running head: INDIVIDUAL ASSET ALLOCATION

Individual Asset Allocation
Name
Institution
Date

1

INDIVIDUAL ASSET ALLOCATION

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Equity Analysis: Individual Asset Allocation
Systematic risk analysis is essential in determining the vulnerability of the portfolio to
the events that can impact aggregate outcomes. A current example is a Covid-19 epidemic,
which is currently affecting the companies' and industries' aggregate income and market returns.
Beta is a tool that indicates the correlation between the expected return from an asset and
market-wide return. Beta indicates the vulnerability of the portfolio to systematic risks (Savor, &
Wilson, 2016). Therefore, analysis of systematic risks is necessary for optimal allocation of the
portfolio in different assets. Based on this analysis, a portfolio of $1 million can be optimally
allocated in different three assets; U.S Treasury bonds, Equity, and cash. Investors h...

Kishnewt2017 (32440)
University of Virginia

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