This Case is aboutÂ RISK MANAGEMENT
PUBLICATION DATE: August 13, 2015 PRODUCT #: KEL913-HCB-ENG
Schumpeter Finanzberatung GmbH Evaluating Investment Risk case solution
Elke Schumpeter established 12 years earlier in Germany has performed very well. The fund applied a low cost marketing strategy that aims a mix of 60% equity market and 40% German Treasury bill but keeps on changing the mix to outperform benchmark.
The fund has outperformed the passive standard by 98 basis points and has grown to over EUR400 million. At the trace of some investors, Schumpeter is currently contemplating enlarging the investment dissertation of her business to comprise investments in individual stocks. She’s examined two companies: Deoleo SA and ThyssenKrupp AG. Schumpeter should determine the best way to assess the danger of these investments before deciding to put money into individual stocks. Pupils are requested to assess the danger of both individual investments (stocks) along with the risk of the total portfolio in SF. The case supplies as means to spell out the intuition supporting the capital asset pricing model and to characterize the differentiation between idiosyncratic (diversifiable) risk and organized (non-diversifiable) risk.