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15. Investment A has an expected return of $25 million and investment B has an expected return of $5 million. Market risk analysts believe the standard deviation of the return A is $10 million, and for B is $30 million (negative returns are possible here).

2a. Estimate the mean return and standard deviation for a portfolio consisting of one asset (N=1). This amounts to calculating the mean return and standard deviation of each of the eight country indexes, and take the averages. 2b. Estimate the mean return and standard deviation for portfolios with N=2. To simplify, calculate the expected return and standard deviation of the 7 equal-weighted portfolios consisting of the US and one other country.1 Take the averages. 2c. Estimate the mean return and standard deviation for portfolios with N=3. To simplify, calculate the expected return and standard deviation of the 6 equal-weighted portfolios consisting of US,

Problem 1: Jonathon Barrs is a manager for Easy Manufacturing, LLC. He wishes to evaluate three possible investments. These investments are for the purchase of new machine tools from Germany, Japan, and a local US manufacturer. The firm earns 10% on its investments and they have a risk index of 5%. The chart below lays out the expected return and expected risks of the three projects.

investor should invest $369.35 in asset A and the remaining $630.65 in asset B. The

6. Do bonds reduce the overall risk of an investment portfolio? Let x be a random variable representing annual percent return for the Vanguard Total Stock Index (all Stocks). Let y be a random variable representing annual return for the Vanguard Balanced Index (60% stock and 40% bond). For the past several years, assume the following data. Compute .

This is an individual assignment. You must work alone to complete this quiz. It is important that you complete all readings and videos prior to attempting the quiz. The completed quiz must be submitted in appropriate assignment folder by the due date and time. Please see the Syllabus > Course Schedule. This quiz is valued at 5 points (5% of course grade).

c) What is the beta on a portfolio consisting of 30% XYZ, 30% ABC, 20% risk free asset and 20% market portfolio? (5 pts)

This exercise is to be done individually. Answers need to be typed and written in full sentences. Marks reflect the number of minimum points that need to be made for each question.

1. The return profile and risk of the S&P 500. In this exercise you will reproduce

portfolio change if you assume a correlation between GE and GM of 0.80 or –0.80?

This assignment has a maximum total of 100 marks and is worth 10% of your total grade for this course. You should complete it after completing your course work for Units 1 through 5. Answer each question clearly and concisely.

d. What would be the investor 's certainty equivalent return for the optimally chosen combination? 2. Consider an investor who has an asset allocation of 50% in equities and the rest in T-Bills. Suppose the expected rate of return on equities is 10%/year and the standard deviation of the return on equities is 15%/year. T-Bills earn 6%/year. a. What is the implied risk aversion coefficient of the investor?

When you feel confident that you have mastered the material in this study unit, complete the following examination. Then submit only your answers to the school for grading, using one of the examination answer options described in your “Test Materials” envelope. Send your answers for this examination as soon as you complete it. Do not wait until another examination is ready. Questions 1–20: Select the one best answer to each question. 1. Which of the qualities required for a good

Coursework is receipted on the understanding that it is the student's own work and that it has not, in whole or part, been presented elsewhere for assessment. Where material has been used from other sources it has been properly acknowledged in accordance with the University's Regulations regarding Cheating and Plagiarism.

Alex Sharpe should invest in Portfolio A, consisting of Reynolds and S&P500. Portfolio A gives higher return with lower risk. The standard deviation and the variance are both lower for portfolio A which means