Change the weights of the assets to improve performance

Assignment Help Financial Management

Reference no: EM131014076

You have these 4 assets.

Asset 1: Mean= 1.04 Standard deviation= 0.02 Correlation= 0.5

Asset 2: Mean= 1.09 standard deviation= 0.08 Correlation= -0.08

Asset 3: Mean = 1.02 standard deviation= 0.11 correlation=0.02

Asset 4: mean= 1.04 Standard deviation = 0.10 Correlation=0.07

(Correlation for asset 1 and 2 is 0.5 ; Correlation for asset 1 and 4 is 0.07, Correlation for asset 2 and 3 is -0.08; Correlation for asset 3 and 4 is 0.02)

So if this was a portfolio, how would you change the weights of the assets to improve performance of your portfolio?

Then how would you optimize it?

Reference no: EM131014076

Questions Cloud

What is the ratio of debt to total long-term capital : A firm has a long-term debt–equity ratio of 0.50. Shareholders’ equity is $2.0 million. Current assets are $320,000, and total assets are $3.200 million. If the current ratio is 1.6, what is the ratio of debt to total long-term capital?

Mutual fund-annual rate of return : Suppose you are committed to owning a $207,000 Ferrari. If you believe your mutual fund can achieve a 13 percent annual rate of return and you want to buy the car in 10 years on the day you turn 30, how much must you invest today?

Percentage increase per year in winners check over period : In 1895, the first Putting Green Championship was held. The winner’s prize money was $210. In 2014, the winner’s check was $1,470,000. What was the percentage increase per year in the winner’s check over this period? If the winner’s prize increases a..

Change in interest rates will affect the bonds price : The rate of return that you would earn if you bought a bond and held it to its maturity date is called YTM. If interest rates rise after a bond has been issued. What will happen to the bond's price and YTM?Does the length of time maturity affect the ..

Change the weights of the assets to improve performance : You have these 4 assets. So if this was a portfolio, how would you change the weights of the assets to improve performance of your portfolio?

Imbed merchandise with small radio frequency identification : Saks Fifth Avenue, a large retailer is going to run an experiment at one of its stores to see how cost effective it will be to imbed merchandise with small radio frequency identification (RFID) chips.

What is the bonds current market price : Callaghan Motors' bonds have 24 years remaining to maturity. Interest is paid annually, they have a $1,000 par value, the coupon interest rate is 10.5%, and the yield to maturity is 10%. What is the bond's current market price? Round your answer to t..

Quantitative problem-what is the value of the bond : Quantitative Problem: Potter Industries has a bond issue outstanding with a 6% coupon rate with semi-annual payments of $30, and a 10-year maturity. The par value of the bond is $1,000. If the going annual interest rate is 7.2%, what is the value of ..

Profit or loss per contract-ignoring transaction costs : You decided to buy Treasury bill futures contracts with a quoted price was 96-50. When you close this position, the quoted price was 95-25. Determine the profit or loss per contract, ignoring transaction costs.

User Account

All Pages