The paper "HSBC Environment " is a perfect example of a business case study. HSBC holdings belong to the British Multinational company. its headquarters are in London and is regarded as one of the largest banks in the world. The company came into operation in 1991 after Hongkong and Shangai banking merged to form a corporation. The company is well-spread all over the world with offices around Africa, Asia, Europe, North America, South America and serves over 8 million customers in the globe. According to reliable statistics from Forbes, the company’ s total assets amounted to $2.693 trillion by 2012. HSBC An endowment is a very important source of income for the university, in the fiscal year 1999, endowment income represented about 25% of the university’ s income, the company managed approximately $15.1 billion in endowment funds in the second quarter of the fiscal year 2000, a large part of the university’ s budget financed by endowment income has been increasing throughout the years. Treasury Inflation-Protected Securities (TIPS) are bonds that give investors security against the effects of inflation on the value of money, their principal, and coupons grow according to the level of prices as measured by the Consumer Price Index.
Harvard’ s portfolio incorporates an 11% target allocation to domestic bonds like US Treasury securities which offer a market return on a fixed income without credit risk. However this investment has risks such as interest rate risks and inflation risks, Domestic securities consist of an annual value of a bond and a coupon rate whose payments are fixed and do not change due to changes in inflation rates, the real value of the principal at maturity can be different at the beginning of investment influenced by factors like inflation. TIPS on the other hand are different because their principal value adjusts to changes in the Consumer Price Index, they offer a real yield of between 3.2%-4.25% and these yields show that the return on cash assumed in the portfolio analysis by the company is too low and the better estimate would be 3.5%.
Thus, it can be an essential asset to hold on to in the portfolio. In contrast, treasury bills offer real yields of 2% and that of treasury nominal bonds is about 3%.
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