Problem regarding the standard deviation of return

Assignment Help Business Management
Reference no: EM13987020

Bob and Ann both make optimal portfolio allocations. Bob has $ 1000 to invest, Ann has $ 2000 to invest. There are 3 assets that they can invest in: a risk free asset with a rate of return of 5%, and two risky assets with the following properties:

• Asset A has expected return of 10% and standard deviation of return of 12%.

• Asset B has expected return of 17% and standard deviation of return of 20%. The correlation between the return on asset A and return on asset B is 0.2.

Assume now that Bob's optimal portfolio is $ 300 in the risk free asset, $ 300 in asset A and $ 400 in asset B. Ann's optimal portfolio has $ 900 invested in asset B, answer

Reference no: EM13987020

Questions Cloud

Highest bidder at a price equal to the highest bid : In which type of auction is the item awarded to the highest bidder at a price equal to the highest bid? A Vickrey Auction B Common-Value Auction C Sealed-bid first-price auction D Second-Price Auction
Disadvantages exist to filing a consolidated return : Advantages and disadvantages exist to filing a consolidated return. Research the various resources you have available and identify an example of when a consolidated return has been advantageous to a group and when consolidation status has not work..
Best estimate of the expected revenue from the auction : A bidders' value for a good may be low ($2), medium ($5), or high ($7). There are an equal number of potential bidders having each value. Suppose two bidders show up for an auction at which the good is offered. The possible outcomes of the auction ar..
Values based on family-health-achievements and wealth : In 900 words or more needs to be general in nature and should reflect your beliefs, and not necessarily a statement of fact. Are your values based on family, health, achievements, wealth, job success, happiness, faith, love, or anything else that you..
Problem regarding the standard deviation of return : Bob and Ann both make optimal portfolio allocations. Bob has $ 1000 to invest, Ann has $ 2000 to invest. There are 3 assets that they can invest in: a risk free asset with a rate of return of 5%, and two risky assets with the following properties:
The magnitude of deadweight loss from the price ceiling : Calculate the magnitude of deadweight loss from the price ceiling. Find a price floor that will result in the same magnitude of deadweight loss.
Assessment of risk for fabrication of helicopter spar : Reston Aviation has been awarded a government contract that requires the fabrication of an unusually large helicopter blade spar. Barbara Matthews, Reston’s President, is faced with two alternatives: Assessment of Risk for Fabrication of Helicopter S..
Calculate the change in consumer surplus due to sales tax : Suppose the market for cigarettes is characterized by the following information: Calculate the magnitude of the consumer surplus and producer surplus in the pre-tax equilibrium. Calculate the tax revenue in the post-tax equilibrium. Calculate the cha..
Decisions for the future based on today information : Who is a manager and how do managers make decisions for the future based on today's information?

Reviews

Write a Review

Business Management Questions & Answers

  Explain absolute advantage and comparative advantage

Define absolute advantage and comparative advantage and explain how they affect trade between nations. Give an example of an absolute advantage

  Generational differences and the public sector workplace

Generational Differences and the Public Sector Workplace

  Determine the various roles that host governments

Determine the various roles that host governments played in this particular global business operation

  Necessary to establish personal jurisdiction over ronnie

Charlotte sued Ronnie for breach of contract. Ronnie received notice of the lawsuit while talking to his neighbor. Has Charlotte satisfied the due process requirements necessary to establish personal jurisdiction over Ronnie?

  Calculate the annual growth rate in sales

Assume sales were $28,873, $35,626, and $47,689 for years 2000, 2001, and 2002, respectively. Calculate the yearly growth rate in sales for 2001 and 2002.

  Public budgetingexplain standardization and specification

public budgetingexplain standardization and specification and explain how they impact the purchasing process amp list

  Deliberate how modelo''s international expansion

Deliberate how Modelo's international expansion was made possible through strategic partnerships with experienced distributors in local markets.

  Explain what value would it be to know were going

Explain What value would it be to know that you were going to be training a class of persons between the ages of 20 and 35?

  Explain are the managers at wyant & wheeler justified

Explain Are the managers at Wyant & Wheeler justified in firing Andrew and What set of criteria would you use to arrive at this decision?

  Balance of payment (bop) transactions

Based upon recording balance of payment (BOP) transactions, determine whether or not the following is a debit, credit, or  no entry to the U.S. Balance of Payment statement.

  An industrys receptivity to unionizationin this posting we

an industrys receptivity to unionization.in this posting we look at a chosen industrys receptivity to unionization. in

  Heisenberg uncertainty for a pair of observable quantities

Mark with a cross (X] where any of the following statements is wrong. Mark the field like this (?) where the statement is correct. [ ] If there exists a Heisenberg uncertainty for a pair of observable quantities robsenrablesl A and E f , it means tha..

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