It's April 2014, and the small investment management business Elke Schumpeter founded twelve years earlier in Frankfurt, Germany, is performing well.
The fund has grown to simply over EUR400 million and has outperformed the passive benchmark by 98 basis points. At the trace of some investors, Schumpeter is now contemplating expanding the investment thesis of her business to include investments in individual stocks. Schumpeter has scrutinized the two businesses: Deoleo SA and ThyssenKrupp AG. Schumpeter needs to determine the best way to measure the risk of those investments before deciding to put money into individual stocks. Students are asked to assess the danger of both individual investments (stocks) as well as the risk of the complete portfolio in SF. The case provides a means to spell out the intuition behind the capital asset pricing model and to characterize the differentiation between idiosyncratic (diversifiable) risk and organized (non-diversifiable) risk.
Schumpeter Finanzberatung GmbH Evaluating Investment Risk case study solution
PUBLICATION DATE: August 13, 2015 PRODUCT #: KEL913-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
Related Case Solutions & Analyses:
Note on Building the Self-Sustaining Firm
Governance at Metallgesellschaft (A)
Janis Jerome
An Overview of Taxation in the United States
Investing in Sponsor-Backed IPOs: The Case of Hertz
NewGrade Energy Inc.
Wall Street, Main Street, and a Credit Crunch: Thoughts on the Current Financial Crisis
Chad-Cameroon Petroleum Development and Pipeline Project (A)
Compensation at Level 3 Communications
Disaster By Design: California’s Experience with Electricity Restructure: The Storm Hits (B)
