Selcting best option for portfolio

Assignment Help Risk Management
Reference no: EM1347049

You are considering investing in two stocks to form a portfolio. You are very risk averse (you do not like risk). Which one of the following stock combinations will you choose for your portfolio (these are your only options)?
Answer
Stocks C & D which both have a beta of 2.0.
Stocks A & B which have correlation coefficient of -1.0.
Stocks G & H which have a correlation coefficient of +1.0.
Stocks E & F which have a correlation coefficient of 0 (zero).

Changes in interest rates represent the type of risk which can be categorized as:
Answer
Unsystematic risk
Firm-specific risk
Non-diversifiable risk
Economics risk

 

Reference no: EM1347049

Determine the annualized loan rate for libors

Determine the annualized loan rate for LIBORs of 6.5 percent and 12.5 percent. Assume the payoff is based on 90 days and a 360-day year. The current LIBOR is 9.5 percent.

Unemployment and compare to forecast for next five years

Analyze the history of changes in GDP, savings, investment, real interest rates, and unemployment and compare to forecast for the next five years. Discuss how government pol

Explain the benefits of developing a cl distribution

Explain the benefits of developing a CL distribution. Also elaborate the characteristics of a CL distribution. Elucidate how CL distributions enable us to assess capital req

Determine the risk associated with investments

Being conservative in nature, he wants to determine the risk associated with investments. In specific terms, he wants to seek data related to both levered and unlevered beta

Consistent with the claim

Solomon company prints baseball cards, The company claims that 40% of the cards are rookies, 70% veterans and 10% are all stars, Suppose a random sample of 100cards has 50 r

How would you define and describe a risk management system

How would you define and describe a risk management system? How would a risk management system differ for a bank/investment firm compared to a construction firm that has high

Discuss the issues in terms of professional ethics

The new IH is offended by all the changes and considers her professionalism violated because of not being allowed to work autonomously. Discuss the issues in terms of profes

Why has the risk management function become more important

Why must a financial manager have an integrated understanding of the five basic finance functions? Why is the corporate governance function considered a finance function?

Reviews

Write a Review

 
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