PROBLEM STATEMENT:
Sharpe wanted to compare the risks involved with the two companies to ensure that her investment will earn high returns in the future. She has to decide in which stock to invest either in Hasbroor Renold Tobacco Company
Introduction
Alex shape is the investor; she had some savings with her, which she saved from children’s future education. She wanted to invest the saving in (S&P) 500 index so that she couldearn more from her investment. She is searching for the stocks from which she may earn the sound returns.
She believes that investing portfolio is wiser than investing all amounts in single share, as portfolio reduces the risk loss. As stated in the case, Standard and Poor (S&P) 500 is the Benchmark has to invest in overall US. Investors use index funds which provide them market exposure without buying them.
Index represents the risk and returns and had historically outperformed mutual funds. Sharpe is considering changing her strategy to more active from her previous passivestrategy. Ms. Sharpe has conducted some financial analysis on which she has narrowed down the two companies for the investment.
Options for Investment:
HASBRO
Hasbrois the second largest industry in the United States performing in the field of Toys. Hasbro always compete the market by introducing more innovative and high quality toys. This helps the company in getting the more customer satisfaction. In 2007, the company introduced toys such as Spiderman 3 and the Fantastic 4, which were of latest and designed toys in the market. On the other hand, the company is also engaged in the manufacturing of movies, like the most popular and full action movie Transformerand other (X-men and X:2, X: man united) which are scheduled to be launch in 2007...................................
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