OGrady Apparel Company Essay Example for Free

OGrady Apparel Company EssayAnalyzing Risk and retrovert on Chargers Products Investments young Sayou, a financial analyst for Chargers Products, a manufacturer of stadium benches, must estimate the run a risk and return of two summations, X and Y. The firm is considering addng these assets to its diversified asset portfolio. To assess the return and risk of from each one asset, Junior gathered data on the annual cash flow and beginning-and end-of-year values of each asset over the immediately preceding 10 years, 1997-2006.These data are summarized in the table below. Juniors investigation suggests that both assets, on average, will tend to perform in the future mediocre as they have during the ago 10 years. He therefore believes that the expected annual return laughingstock be estimated by finding the average annual return for each asset over the past 10 years.Junior believes that each assets risk can be assessed in two ways in isolation and as part of the firms divers ified portfolio of assets. The risk of the assets in isolation can be piece by using the standard deviation and coefficient of variation of returns over the past 10 years. The capital asset pricing model (CAPM) can be used to assess the assets risk as part of the firms portfolio of assets. Applying near sophisticated quantitative techniques, Junior estimated betas for assets X and Y of 1.60 and 1.10, respectively. In addition, he found that the risk-free wander is currently 7% and that the market return is 10%.