Professional Documents
Culture Documents
Case Study: 1
1.
mining, processing and refining of precious, base and critical metals such as
gold, silver, copper, cobalt, zinc, magnesium and graphite (Hronsky and
Groves, 2008). A minerals company can therefore have several investment
projects based on its core business activities. Under exploitation, such a
company will have investment projects within geological parameters
including soil sampling, geological engineering and mine tunneling (Hronsky
and Groves, 2008). These projects involve the evaluation of potential mineral
deposit sites. Mining projects involve the actual acquisition of minerals from
the ground and involve projects like drilling, construction of tunnels,
procurement of tools and equipment as well as development of mining
infrastructure (Upstill and Hall, 2006). Processing and refining projects entail
the purification and alternation of the physical and chemical states of
minerals to enhance their capacity in purity, clarity or tensile strength. These
projects involve the establishment of processing plants and acquiring the
requisite resources to facilitate purification, testing and storage of minerals
(Upstill and Hall, 2006).
2.
planning of Antipodes Minerals Resources Co. (AMR). This will involve the
analysis of the companys financial resources and potential outlays of the
company, to determine the profitability of proposed and existing projects and
allocate resources based on the short and long term objectives of the
company (Tulimieri and Banai, 2010). I will also be involved in the evaluation
of the companys financial risk by assessing existing projects and quantifying
the level of risk exposure the company might face if the projects fail. This will
involve an assessment of the invested capital in the project as well as the
potential of such projects to fail either due to a decrease in demand;
emergence of low cost alternatives as well as the break-even period (BEP) of
the project succeeds (Tulimieri and Banai, 2010). I will be required to
evaluate the companys financial statements to determine the overall fiscal
strength of the company. Under this responsibility, I will also be expected to
play an advisory role in making recommendations that alight with the
companys goals (Tulimieri and Banai, 2010).
3.
cause pollution in the course of its business activities. The company should
therefore be accountable to the communities around the areas it is
conducting its business activities (Luning, 2012). AMR should for example
conduct civic education in its areas of activity to edify the public on potential
dangers that can result from the mining process as well as the potential
benefits. In addition, the company should establish free clinics that treat
ailments and infections such as repertory and eye infections that may occur
as a result dispersed pathogens during the mining process (Luning, 2012).
Clients advisers
debt to GDP ratio have the allowed the country to preserve the AAA rating on
its debt and bonds (Celk, 2012). The Reserve Bank of Australia has
underscored the yield on the 10 year Australia government bonds currently
stands at 3.12%. This yield is notably higher than the yield currently being
offered by economies listed on the MSCI EAFE index. Clients are therefore
advised to transfer a portion of their investment to a Bond Fund at this point
in time is it is likely to offer relatively high returns at minimum risk. The AAA
rating on Australian sovereign debt implies the country is not likely to default
on its debt obligations and therefore investors should hedge their portfolios
with Australian Bonds (Celk, 2012).
International diversification of ones portfolio in the post Global
financial crisis era is one of the most effective ways of hedging against
market, interest rate and portfolio risk. In the post Global financial crisis era,
countries are recovering at different paces, which imply that, the portfolio is
likely to experience a degree of volatility (Knill, Lee and Mauck, 2012). For
instance the global recession is more pronounced in North America and parts
of the Euro zone such as Greece, Italy and Portugal, while countries such as
New Zealand, Australia, China and S. Korea have maintained relatively stable
economies (Knill, Lee and Mauck, 2012). However, despite the volatility, the
portfolio is likely to generate high returns considering markets are presently
at the bottom or support levels which implies that investors will be able to
purchase security assets at a relatively low cost which will increase their
returns as the global economy improves.
Reference List
Celk, S., 2012. The more contagion effect on emerging markets: The
evidence of DCC-GARCH model. Economic Modeling, 29(5), p.1946
1959.
Goergen, M., Renneboog, L. and Khurshed, A., 2006. Explaining the diversity
in shareholder lockup agreements. Journal of Financial Intermediation,
15(2), p. 254280.
Hronsky, J. M. and Groves, D. I., 2008. Science of targeting: definition,
strategies, targeting and performance measurement. Australian
Journal of Earth Sciences, 55(1), p.3-12.
Huij, J. and Derwall, J., 2011. Global equity fund performance, portfolio
concentration, and the fundamental law of active management. Journal
of Banking & Finance, 35(1), p.155165.
Jenkins, H. and Yakovleva, N., 2006. Corporate social responsibility in the
mining industry: Exploring trends in social and environmental
disclosure. Journal of Cleaner Production, 14(3-4), p.271284.
Knill, A., Lee, B. and Mauck, N., 2012. Sovereign wealth fund investment and
the return-to-risk performance of target firms. Journal of Financial
Intermediation, 21(2), p.315340.
Kraus, K. and Strmsten, T., 2012. Going public: The role of accounting and
shareholder value in making sense of an IPO. Management Accounting
Research, 23(3), p.186201.
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