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(a) Zarine is a portfolio manager and leading in Malaysia unit trust. She is considering the benefits of her diversification investment by investing in foreign country. She can purchase shares in individual country with the following characteristics: Share market Expected Return Standard deviation (%) (%) United States 15.20 7.50 United Kingdom 18.50 9.25 Japan 19.50 5.25 Determine the expected return and standard deviation for international portfolio by following two alternatives: i. She decides to invest equally in United states and United Kingdom with the correlation for both is 0.83. ii. She decides to invest 40 percent in United Kingdom and 60 percent in Japan with the correlation is 0.52.

(a) Zarine is a portfolio manager and leading in Malaysia unit trust. She is considering the benefits of her diversification investment by investing in foreign country. She can purchase shares in individual country with the following characteristics: Share market Expected Return Standard deviation (%) (%) United States 15.20 7.50 United Kingdom 18.50 9.25 Japan 19.50 5.25 Determine the expected return and standard deviation for international portfolio by following two alternatives: i. She decides to invest equally in United states and United Kingdom with the correlation for both is 0.83. ii. She decides to invest 40 percent in United Kingdom and 60 percent in Japan with the correlation is 0.52.

Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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(a) Zarine is a portfolio manager and leading in Malaysia unit trust. She is considering the benefits of her diversification investment by investing in foreign country. She can purchase shares in individual country with the following characteristics: Share market Expected Return Standard deviation (%) (%) United States 15.20 7.50 United Kingdom 18.50 9.25 Japan 19.50 5.25 Determine the expected return and standard deviation for international portfolio by following two alternatives: i. She decides to invest equally in United states and United Kingdom with the correlation for both is 0.83. ii. She decides to invest 40 percent in United Kingdom and 60 percent in Japan with the correlation is 0.52. Based on two alternatives above, which alternative is the best for her to make an investment and justify.
Transcribed Image Text:(a) Zarine is a portfolio manager and leading in Malaysia unit trust. She is considering the benefits of her diversification investment by investing in foreign country. She can purchase shares in individual country with the following characteristics: Share market Expected Return Standard deviation (%) (%) United States 15.20 7.50 United Kingdom 18.50 9.25 Japan 19.50 5.25 Determine the expected return and standard deviation for international portfolio by following two alternatives: i. She decides to invest equally in United states and United Kingdom with the correlation for both is 0.83. ii. She decides to invest 40 percent in United Kingdom and 60 percent in Japan with the correlation is 0.52. Based on two alternatives above, which alternative is the best for her to make an investment and justify.
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