Write a paper on Portfolio management and corporate finance

Write a paper on Portfolio management and corporate financePlease provide long answers to each question (at least half a page) using the appopriate terminology.

Q1:
Gasgard is a country which is going through a historical structural change in its economy. Experts are very confident in stating that the economic situation in Gasgard will not change for the next five or ten years. Lokey, a stockbroker, gives his clients the following advice: “Avoid making any investments in Gasgard stocks (via Heimdal the national stock exchange of Gasgard), because the expected returns of stocks are believed to be below the historical average for the next five to ten years.”
Is Lokey’s advice sensible? Explain.

Q2:
The risk of a portfolio is the variance of its return. However, the variance of the returns of an individual asset is not an appropriate measure of its risk. Discuss.

Q3:
The Polish government is about to issue a new 10-year sovereign bond. According to financial specialists, investors will require a 5% return on their investment in this bond, whereas investors require only a 2% return on a German government bond with the same characteristics.. However, an employee in the Ministry of Finance suggests that Poland should change its public debt estimation method. As a result of this reform, nothing would change in the Polish economy apart from the reported level of public debt. According to the Ministry of Finance, investors would require a lower return on the 10-year Polish bond, if the new public debt, estimated with the new method, is lower. Do you agree?

Q4:
Salt-Bae is a food company which just came across an average-risk investment project that offers a rate of return of 8%. This is less than the company’s normal rate of return, but one of the firm’s directors notes that the company can easily borrow the required investment at 1%. He suggests that if the bank lends them money at 1%, then their cost of capital must be 1%. And the project’s return is higher than the cost of capital, so they move ahead. How would you respond?

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