The amount invested is one of the required inputs in a portfolio optimization model. True or False

Q: Optimal portfolios can be obtained without diversification. True or false?

A: optimal portfolio are the one that minimises the risk for given level of return.

Q: Which of the following statements is correct concerning a mean-variance efficient portfolio of risky…

A: Every investor expects a higher return for a high level of risk they take. Investors who are willing…

Q: What is Sharpe ratio? Show the link between Sharpe ratio and best efficient portfolio.

A: Sharpe ratio was developed by William F. Sharpe so that investors can analyze the returns earned…

Q: Define the following terms, using graphs or equations to illustrate youranswers wherever feasible:a.…

A: Portfolio Sets of assets are termed as a portfolio. A portfolio comprises the number of bonds,…

Q: main investment in an optimal portfolio

A: Optimal portfolio helps to minimize the risk for a give rate of return or its helps to maximize  the…

Q: Give the arguments for active portfolio management

A: An active portfolio manager is an investor that buys and sells stocks in order to outperform a…

Q: Define required rate of return on a portfolio

A: Introduction: Required rate of return is nothing but the minimum rate that an investor would…

Q: Explain why income, budget, age, holging period and risk taking capacity helps in making the best…

A: A portfolio is a set or the combination of all shares, stocks, cash, mutual funds, bonds. It is…

Q: How does an efficient portfolio relate to a feasible portfolio?

A: PortfolioSets of assets are termed as a portfolio. A portfolio comprises the number of bonds,…

Q: Calculate r. Decide whether to invest in a portfolio. Calculate optimum weights of investment in…

A: Note: Since you have posted a question with multiple sub-parts, we will solve the first three…

Q: How duration and convexity can help investors better manage their fixed-income portfolios. Give…

A: Convexity is referred to as the risk management tool, which helps in measuring as well as managing…

Q: Explain the effects of diversification in portfolios in several lines.

A: In finance, portfolio diversification refers to the management of risk strategy by combining a…

Q: Discuss the difference between Systematic Risk and Unsystematic Risk. What kind of strategies we can…

A: Risk in finance is the situation that may or may not arise in the future and has an impact on the…

Q: Explain the relationship between risk and return in portfolio management!

A: Risk refers to an adverse possibility of something to get happen. Risk is the possibility of loss.…

Q: What are the benefits and advantages of diversification for a portfolio?

A: Diversification of portfolio means allocating investments to different assets so that there is…

Q: Conceptually, how does an investor choose his or her optimal portfolio?

A: The point where any of the ‘indifference curve’ are tangent to the efficient set of portfolios is…

Q: Why the advantage of Portfolio analysis is it stimulates the use of externally oriented data to…

A: Portfolio analysis is defined as the study of an investment portfolio, which will also be a process…

Q: What is the required rate of return on the new portfolio?

A: Required return is the minimum return an investor will demand on the principal amount invested. It…

Q: Explain the concept of 'beta within the frame work of CAPM model. Discuss the relevance of the…

A: CAPM is the Capital asset pricing model. The formula is: Expected return=Risk free rate+Beta×Market…

Q: The time weighted return is a method of measuring performance. Which of the following statements…

A: The time-weighted return method is a method to compute the compound rate of interest in portfolio…

Q: Why would an investor prefer a constrained portfolio optimization approach?

A: Portfolio optimization is nothing but a system in which a shareholder provides the correct advice on…

Q: What is CAPM and how it used in portfolio management?

A: Risk and return are the two main parts of any investment and before investing in any security or…

Q: Cakulate the expected retun and risk of a portfolio

A: Portfolio Risk: Portfolio risk is the measurement of variance between the assets and the targeted…

Q: how to calculate portfolio beta?

A: Beta is used while calculating the volatility of the investment. It measures the systematic risk of…

Q: What is the purpose of portfolio management?

A: A portfolio is a systematic method of selection of investment mix to get benefit with a limited risk…

Q: What can be understood from active portfolio?

A: There are two strategies or approaches which can be used in management of portfolios which are…

Q: What does it mean that portfolio diversification can reduce risk, and how does the efficient…

A: Risk is the measurable probability of loss on an investment. It includes the possibility of losing…

Q: What is the relationship between the efficient portfolio and the feasible portfolio?

A: An efficient portfolio can be defined as portfolio which maximizes return for given level of risk or…

Q: Explain why we construct a zero-cost portfolio when constructing factors.

A: A zero-cost strategy does not entail any additional expense to execute or costs a business or…

Q: What problems occur in (portfolio management)?

A: In the simplest terms, a portfolio is termed as the combination of various financial investments.…

Q: Describe how a portfolio manager may help to mitigate the impact of these risks on portfolio.

A: Portfolio manager is the individual or the group of people who is professional in his field,…

Q: Calculate Portfolio Returns with example?

A: The determination of profit or loss on the investment in a portfolio is called portfolio return. The…

Q: Discuss the role of risk-free assets in the Markowitz Portfolio Theory.

A: Harry Markowitz always focused on lowering the risk and diversification in order to maximize the…

Q: Explain the impact and significance Separation Theorem has when chosing the optimal portfolio.

A: Fisher's separation theorem states that the primary goal of any corporation is to increase its…

Q: a.Calculate the Return, Risk and CV of the portfolio and justify your decision for which portfolio…

A: Portfolio refers to the collection of all individual securities or investments held by a person or…

Q: Consider the following graph.   According to Markowitz’ portfolio theory, which point on the graph…

A: Optimal portfolio is the portfolio having highest return for a given risk.

Q: Explain the meaning and differences between the correlation coefficients “p” in the traditional…

A: The correlation coefficient "ρ" and beta coefficient " β" are two important coefficients of…

Q: What is a philosophy on hedging investment for multicurrency portfolios.

A: Multicurrency portfolios are those where in a portfolio that consist of currency investments of…

Q: What is the relationship between risk and return in (portfolio management)

A: Portfolio management involves prioritization, selection and control of the projects and programmes…

Q: Which are the different assets that have the potential to be combined efficiently in a portfolio…

A: The efficient frontier graphically represents portfolios that maximize returns for the risk assumed.…

Q: What is the portfolio investment concept?

A: Portfolio is a group of stock, shares and bonds owned by the investors. It is a combination of asset…

Q: Define efficient portfolio

A: Portfolio refer as an investment in a group of financial assets such as stocks, bonds and any other…

Q: Explain, with the aids of a graph, the term efficient portfolios and how to achieve them

A: An efficient frontier is a set of optimal portfolios that offer the highest expected return for a…

Treasury Market

On-the-run securities are the most recently issued securities in the market depth and are therefore traded at some premium. The off-the-run securities are the ones issued just before the most recent ones. The on-the-run securities have a lower yield to the investor than the off-the-run securities.