Explain how a portfolio should be constructed

Assignment Help Finance Basics
Reference no: EM13839254

The management of Gawain plc is evaluating two projects whose returns depend on the future state of the economy as shown below:

The project (or projects) accepted would double the size of Gawain.

Required

(a) Explain how a portfolio should be constructed to produce an expected return of 20 per cent.

(b) Calculate the correlation between projects A and B, and assess the degree of risk of the portfolio in (a).

(c) Gawain’s existing activities have a standard deviation of 10 per cent. How does the addition of the portfolio analysed in (a) and (b) affect risk?

Reference no: EM13839254

Questions Cloud

Discussion of the honeymoon effect : Directions: Discuss one observation of each of the three influences I mentioned from three different presidents. Also, find one "honeymoon effect" from any president other than Obama, and describe how pronounced it is. For example, choose one preside..
What is role of socio-cultural competencies for manager : What is the role of socio-cultural competencies for the professional manager in making a positive difference to society?
The development of modern law enforcement : Compare (similarities and differences) the development of modern law enforcement agencies and systems in the northeast, southeast, and western regions of the United States. •Compare (similarities and differences) the development of modern law enforce..
Develop an individual leadership reflection and action plan : Develop an Individual Leadership Reflection and Action Plan that will provide a reflection on your leadership style and potential. The paper should provide a personal leadership philosophy and a discussion on how that philosophy might, or might n..
Explain how a portfolio should be constructed : Explain how a portfolio should be constructed to produce an expected return of 20 per cent. Calculate the correlation between projects A and B, and assess the degree of risk of the portfolio in (a). Gawain’s existing activities have a standard deviat..
Research paper - topic- to vaccinate or not to vaccinate : Write a research Paper on given topic- Research Paper - Topic: To Vaccinate or Not to Vaccinate
Calculate the amount of heat transferred : A closed rigid vessel having a volume of 0.566 m3 is filled with steam at 0.800 MPa and 250.°C. Heat is transferred from the steam until it exists as saturated vapor. Calculate the amount of heat transferred during this process.
Price elasticity of demand for a commodity : Explain why each of the factors may influence the own price elasticity of demand for a commodity - Consumer preferences, that is, whether consumers regard the commodity as a 'luxury'' or a 'necessity''.
Calculate the angle below the horizontal below : A child throws a ball with an initial speed of 8.00 m/s at an angle of 40.0° above the horizontal. The ball leaves her hand 1.00 m above the ground and experience negligible air resistance. I know how to calculate the velocity before the ball hits th..

Reviews

Write a Review

 

Finance Basics Questions & Answers

  Suppose your credit card issuer states that it charges a

suppose your credit card issuer states that it charges a 15.00 nominal annual rate but you must make monthly payments

  Would an average investor engage in short selling

Would an average investor engage in short selling?

  Identify investments in financial institutions such as

identify investments in financial institutions such as savings associations credit unions insurance companies or a

  Which unit would you recommend

If the WACC rose to 15% would this affect your recommendation ? EXplain your answer and the reason this result occurred.

  Computation of payback period and npv

Computation of payback period and NPV If your esquire a payback period of two years, will you make the movie

  Calculate lowest return

If you require a real growth in purchasing of your investment of 8 percent and you expect the rate of inflation over the next year to be 3 percent,

  What is the payment every year

You have decided to buy a perpetuity. The bond makes one payment at the end of every year forever and has an interest rate of 5%. If you initially put $1000 into the bond, what is the payment every year?

  Develop a 10- to 12-slide powerpoint presentation excluding

you have been asked by a manager in your organization to put together a training program explaining net present value

  Determination of monthly payments

Bill Gates wishes to fund a new charter school to forever receive $10 million yearly starting in five years. After the fund is completed in 5-years, it will earn 8% interest compounded yearly.

  Consider a bank with the following balance sheet what is

consider a bank with the following balance sheetassets millionsliabilities millionsreserves35zero-interest

  What is the stick worth today

An analyst for Smith Pharmaceuticals is forecasting dividends over the next 5 years, as follows $1.50(Y1), $2.00(Y2), $2.75(Y3), $3.25(Y4) and $4.00(Y5).

  A buyer with a yearly gross income of 45000 is considering

a buyer with a yearly gross income of 45000 is considering a property with annual taxes of 1450. what is the maximum

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd