Assume that we have three assets. The first one has expected return μ1 = 10% and standard deviation of return equal to σ1 = 0.14. The second has expected return μ2 = 20% and standard deviation of return equal to σ2 = 0.2. The third asset has expected return μ3 = 15%. We would like to determine the range of the standard deviation of the third asset so that non of the asset dominates another. This range is an interval with a lower bound a and an upper bound b. What equals the lower bound a of the interval? Please insert your result with two decimals
Assume that we have three assets. The first one has expected return μ1 = 10% and standard deviation of return equal to σ1 = 0.14. The second has expected return μ2 = 20% and standard deviation of return equal to σ2 = 0.2. The third asset has expected return μ3 = 15%. We would like to determine the range of the standard deviation of the third asset so that non of the asset dominates another. This range is an interval with a lower bound a and an upper bound b. What equals the lower bound a of the interval? Please insert your result with two decimals
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume that we have three assets.
The first one has expected return μ1 = 10% and standard deviation of return equal to σ1 = 0.14. The second has expected return μ2 = 20% and standard deviation of return equal to σ2 = 0.2. The third asset has expected return μ3 = 15%.
We would like to determine the range of the standard deviation of the third asset so that non of the asset dominates another.
This range is an interval with a lower bound a and an upper bound b.
What equals the lower bound a of the interval? Please insert your result with two decimals.
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