Describe how you would invest in the following case: You have been given $300 million to invest and manage. The fund is a pension/retirement fund so its perspective is long term with low risk of loss of capital and a required return of 5% per year. In order to reduce the investment risk you are instructed to make 12 investments of $25 million dollars each. Your challenge is to determine if the fund you are managing should invest $25 million dollars in the stock of the company you have selected for analysis.
This means you are going to invest $25M each in the stocks of 12 different companies. Out of these 12 companies, you are to perform the investment analysis on just one to justify the investment of the $25M in this company's stock.
-Almost all the information you need can be found in the company's 10-K reports and stock-listing websites.