User Account

All Pages

Find how would assess the performance of the portfolio

Assignment Help Financial Accounting
Reference no: EM132608729

               Assets Expected                   Rate of Return(%)                          Risk(%)

1                 US Treasury Note                         2                                        0.75

2                Merrill Lynch Bond                       5.7                                         2.5

3                JP Morgan Stock                           7                                         3.5

An investor wants to set up a portfolio of TWO assets, by choosing two assets from the list of THREE assets given in the table above. In the portfolio, the investor wants to hold the two assets in equal proportions.

It has been estimated that the correlation coefficient between the return of the assets are as follows:

Correlation coefficient (return US treasury note, return Merril Lynch Bond)= - 0.5

Correlation coefficient (return US treasury note, return JP Morgan Stock)= - 0.3

Correlation coefficient (return Merril Lynch Bond, return JP Morgan Stock)= 0.6

Assume you are a portfolio manager and you must advise the investor in the investment decision.

Question (a) Detail how you would assess the performance of the portfolio pertaining to the investor and in which portfolio would you advise the investor to invest and why?

Reference no: EM132608729

Questions Cloud

How many pairs of sunglasses should REI buy : Frank offers a price of $50 for each unit, but no longer accepts returns. How many pairs of sunglasses should REI buy to maximize their expected profits
Discuss appropriate structures of the datasets : The Final Paper for this course will enable you to identify 2 data sets and discuss appropriate structures of the datasets. Describe the dataset fields
Record the depreciation expense using straight-line method : Record the depreciation expense for 2021 using the straight-line method assuming the company chooses to prorate depreciation
Prepare a partial balance sheet for solid company : Prepare a partial balance sheet for Solid Company at December 31, 2021 highlighting the shareholders' equity section. Assume the company reported net income
Find how would assess the performance of the portfolio : Find How would assess the performance of the portfolio pertaining to the investor and in which portfolio would you advise the investor to invest and why?
Reflecting on your internship : What was the best and worst parts of your overall experience? What surprised you about this internship? What, if any, were any dissapointments?
Provide a critical analysis and review of one current issue : Critical synthesis of the literature, with conclusions drawn. Please refer to the QManual, in this Moodle section for guidance on how to construct a report.
Calculate Terry net pay : He pays $25.50 in union dues per pay period. Calculate Terry's net pay; He lives in Alberta and is a claim code 3 for both Federal and Alberta
What is the annual dividend on the preferred shares : Preferred shares issued at $100, and 50,000 common shares issued at $1, at December 31, 2021. What is the annual dividend on the preferred shares?

Reviews

Write a Review

Financial Accounting Questions & Answers

  Determine net present value of the investment in machine

Determine the net present value of the investment in the machine. (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount.

  Determine the liability for gift certificates

Determine the liability for gift certificates to be reported in the December 31, 2013 balance sheet. What is the appropriate classification (current or noncurrent) of the liabilities at December 31, 2013?

  Nbspq1a list the accounting standards issued by icai

nbspq.1a. list the accounting standards issued by icai. nbspnbspnbspnbspnbsp 1b. write short notes of ifrsnbspq.2

  Accounting treatment-including any required disclosures

In August, 2010, a worker was injured in the factory in an accident partially as the result of his own negligence. The worker has sued Wesley Co. for $800,000. Counsel believes it is reasonably possible that the outcome of the suit will be unfavorabl..

  Company is considering the purchase of new machine

A company is considering the purchase of a new machine for $54,000. Management predicts that the machine can produce sales of $16,600 each year for the next 10 years. Expenses are expected to include direct materials, direct labor, and factory overhe..

  Journal entry to record the purchase of the equipment

At the beginning of 2016, VHF Industries acquired a equipment with a fair value of $7,581,580 by issuing a five-year, noninterest-bearing note in the face amount of $10 million. The note is payable in five annual installments of $2 million at the end..

  Cost of product manufactured according to variable costing

Which of the following would be included in the cost of a product manufactured according to variable costing?

  Where would the various costs be assigned

In an organization that does not use responsibility accounting, where would the various costs be assigned? What effect might this have on future printing orders from the marketing department?

  Determine the revised annual depreciation expense

On January 1, 2007, Blizzards-R-Us purchased a snow-blowing machine for $85,000. Determine the revised annual depreciation expense for 2009.

  Determine the cost of the eight house contract

Determine the cost of the 8 house contract. Lawn & Order does landscaping for clients. Lawn & Order recently signed a landscaping

  Calculate payback and the net present value

What required annual yield must be earned before the investment makes economic sense and calculate payback and the net present value.

  Consider the aspects of internal control

1. Internal controls are a set of procedures adopted by an organization primarily to check frauds and errors and increase operational efficiency.Consider the aspects of internal control and respond to the following:List ten internal controls that an ..

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!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

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