Stock assignment

1

Name

Unit name

Unit code

Date

1 (a ) percentage change in portfolio 9603- 9929 100

9929 -3 .3

Percentage change in single stock 9729- 9999 100

9999 -2 .7 (b ) Portfolio consists of stock from different firm and different industry therefore changes in economic condition will have different impact on various stocks where some are expected to rise and other falls in value . Therefore movement in portfolio value is not in one direction but for a single stock changes in the market will cause the stock to

br either increase or decrease i .e . portfolio consists of various stock therefore the change in stock (c ) An individual stock is expected to have the largest percentage change in movement in stock value is in different direction therefore the net effect is expected to be small furthermore a change in one stock in the portfolio will have less impact on a slight change in the market can cause the value to increase to a greater extent or decrease drastically (mayo , 2007

2 (d ) an individual stock is expected to have a greater amount of variation in value compared to portfolio since in a portfolio it is possible to diversify risk while for an individual stock diversification of risk is not possible

2 . Future contracts

Futures contracts are used to caution exporters against foreign exchange risk . The exchange rate...