Management, Mathematics

An investment manager at TD Ameritrade is making a decision about a $10,000,000 investment. There are four portfolio options available and she is looking at annual return of these portfolios to choose one. Market has four possible situations: bad, average, good, and excellent. Each portfolio may have a different estimated rate of return under a known market situation. For “Bad”, “Average”, “Good”, and “Excellent” market, “Option 1” has return rates of 33%, 28%, 1%, and loss of 15% respectively. These numbers are 22%, 12%, 17%, and loss of 5% for “Option 2”, 8%, 9%, 14%, and 16% for “Option 3”, and finally for “Option 4” these rates are loss of 2%, 5%, 12%, and 35% under “Bad”, “Average”, “Good”, and “Excellent” market situations.
a. Compare the outcomes for all portfolios under any market situation. What is the best portfolio under Minimax Regret rule?
b. Does the outcome change if the investment decision was made based on the expected value of portfolios? Why? Probabilities for bad, average, good, and excellent market situations are 35%, 22%, 25%, and 18% respectively.

Posted Date: 4/21/2012 2:30:22 AM | Location : United States







Related Discussions:- Management, Assignment Help, Ask Question on Management, Get Answer, Expert's Help, Management Discussions

Write discussion on Management
Your posts are moderated
Related Questions
Now we need to discuss graphing an equation. The first question which we have to ask is what accurately is a graph of an equation?  A graph is the set of all the ordered pairs whos

Metallic spheres of radii 6 centimetre, 8 centimetre and 10 centimetres respectively are melted to form a single solid sphere. Find the radius of the resulting sphere.

Can anyone help with my exam. I have 8 questions to do which is due on 02-14-13

R is called as a transitive relation if (a, b) € R, (b, c) € R → (a, c) € R In other terms if a belongs to b, b belongs to c, then a belongs to c.         Transitivity be uns


Susan begins work at 4:00 and Dee starts at 5:00. They both finish at the similar time. If Susan works x hours, how many hours does Dee work? Since Susan started 1 hour before

Ask questutfjion #Minimum 100 words accepted#

The owner of TMH Hospital wants to open a new facility in a certain area. He usually builds 25-, 50-, or 100-bed facilities, depending on whether anticipated demand is low, medium

Q. Define Combined Functions? Ans. We are often interested in functions which combine a trigonometric function with another type of function.  For example, y = x + sinx wi

Decision Trees And Sub Sequential Decisions A decision tree is a graphic diagram of different decision alternatives and the sequence of events like if they were branches of a t