User Account

All Pages

Canadian market portfolio and chinese market portfolio

Assignment Help Finance Basics
Reference no: EM133004601

1. A Canadian investor is considering a portfolio of the Canadian market portfolio and Chinese market portfolio. The information about this investment is given as follows.

  • Investment period: one year
  • Portfolio weight: 40% in the Canadian market portfolio and 60% in the Chinese market portfolio.
  • During the investment period, the Chinese RMB appreciates by 5% against the Canadian dollar.
  • The Canadian market portfolio return (CAD) is 7% per annum with a variance of 0.0169, and the Chinese market portfolio return (Chinese RMB) is 12% per annum with a variance of 0.0484.
  • The standard deviation of the rate of change in the CAD/RMB exchange rate is 9%. The estimated correlation between the Chinese RMB return and the rate of change in the exchange rate is 0.20.
  • The correlation between the Canadian and Chinese market portfolios is 0.40.

A) What is the return on the Canadian investor's portfolio?

B) What is the standard deviation of the Canadian investor's portfolio?

C) What are the pros and cons of such an international investment compared with a pure Canadian domestic investment

Reference no: EM133004601

Questions Cloud

What the adjusting journal entry to record bad debts expense : What the adjusting journal entry to record bad debts expense will be for?An aging analysis of accounts receivable indicates that $108,000 is expected
Security proposal of benedicta : What effect does using the security proposal of Benedicta have on her rate of return? How much of the company does she own?
What the carrying amount of accounts receivable : An aging analysis of accounts receivable. What the carrying amount (net realizable value)of accounts receivable ( after adjustment ) on December 31 will be
Expected ethical behaviors of corporate officers : As an investor; Discuss your views related to the expected ethical behaviors of corporate officers in financial management related to Martha Stewart case.
Canadian market portfolio and chinese market portfolio : 1. A Canadian investor is considering a portfolio of the Canadian market portfolio and Chinese market portfolio. The information about this investment is given
What amount of bad debts expense to be recorded at year end : Pitt uses 5% of net credit sales to estimate uncollectible accounts receivable at year end. The amount of bad debts expense to be recorded at year end is
What is the profit of the business in the year ended : On that date, the only asset was a bank balance of $10,000. What is the profit of the business in the year ended 31 December 2016
What does the literature say about the identified problem : What does the literature say about the identified problem and what knowledge gaps does your research seek to fill?
How do research skills benefit investment decisions : How do research skills benefit investment decisions?

Reviews

Write a Review

Finance Basics Questions & Answers

  What does the current treasury yield curve look like today

What does the current treasury yield curve look like today?

  Diagnosed with severe gastroenteritis and shock

She became ill and required emergency treatment on the 16thof September. She was eventually diagnosed with severe gastroenteritis and shock.

  Various forms of taxation

1. There are a number of funding sources utilized to support social welfare programs. Choose one and discuss it in detail. 2. What do you see as some of the issues surrounding the various forms of taxation when we look at funding social welfare pr..

  What is the price of the stock today

If the required return is 12 percent, what is the price of the stock today?

  When the change to socialized medicine is three years away

Why would this happen and why now, when the change to socialized medicine is three years away? How could you use options on these bonds to guard against lose?

  Effect of cultural values on marketing plan

What about the effect of cultural values on your marketing plan (such as the importance of nutrition and exercise or increased interest in earth-friendly

  Find price-earnings ratio-computers and more inc

Computers and More, Inc. has a market-to-book ratio of 3.5, net income of $84,000, a book value per share of $20.16, and 60,000 outstanding shares.

  Numbered higher than the ball picked third

He repeated this process 2 more times. What is the probability that the ball picked first is numbered higher than the ball picked second and the ball picked second is numbered higher than the ball picked third?

  What would you want to see in a team charter

What would you want to see in a team charter (i.e., rules of engagement) for this development project?

  Estimate the weighted average cost of capital

If the company is in the 34 percent tax bracket, what is the weighted average cost of capital? Round the answer to two decimal places in percentage form.

  Role of risk measurement in managing revenue risk

What is the role of risk measurement in managing revenue risk.

  The pound spot rate is 156 the euro spot rate is 125 a

the pound spot rate is 1.56. the euro spot rate is 1.25. a bank quotes the poundeuro cross-rate as pound 0.94euro. if

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