As a portfolio manager, you are required to take investment decision from the following two alternative scenarios: (Decision Criterion: Select a portfolio on relative risk basis) Scenario 1: Construct a portfolio with 60% investment in ICC: Expected Return (in %) Risk (as Std Div.) Covariance BPL 12 4 BPL & ICC: -1.2 ICC 7 2 Scenario 2: Construct equal weighted portfolios from following securities Expected Return (in %) Risk (as Std Div.) Covariance PSL 11 5 PSL & IPL: 3.75 IPL 8 3
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Scenario 1: Construct a portfolio with 60% investment in ICC:
Expected Return (in %) Risk (as Std Div.) Covariance
BPL 12 4 BPL & ICC: -1.2
ICC 7 2
Scenario 2: Construct equal weighted portfolios from following securities
Expected Return (in %) Risk (as Std Div.) Covariance
PSL 11 5 PSL & IPL: 3.75
IPL 8 3
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