Solution-Determining the risk of the portfolio

Determining the risk of the portfolio

Reference no: EM133204997

The Bank of Tinytown can only approve two loans but has four loans that the credit department has identified. Given the data presented in Table 1 what are the expected return and standard deviation of the portfolio that has the least risk? Given the covariances, can the calculation be simplified? What will the risk of the portfolio be, given the simplification?

Table 1
Item	Loan Size	Return	Variance and Covariance
Item	($ million)	(%)	Loan A	Loan B	Loan C	Loan D
Loan A	$ 1,600.0	11.0	0.1065
Loan B	$ 1,600.0	7.50	0.0425	0.0525
Loan C	$ 1,600.0	12.0	- 0.1000	0.0650	0.0975
Loan D	$ 1,600.0	8.0	0.0850	0.0355	0.0750	0.0825

Reference no: EM133204997

Questions Cloud

Which stakeholders are most and least prioritized : How have these companies prioritized their stakeholders? Which stakeholders are most and least prioritized?

Explain medical and other interventions that may alleviate : Explain medical and other interventions that may alleviate the problem or its symptoms, including beneficial and adverse effects.

Discuss value of a specific service has changed from covid : Discuss how the value of a specific service has changed from COVID, and how the traditional quality elements have shifted. Western Illinois University.

Create chart containing three forms of business organization : HCS/380 Health Care Accounting Assignment - Health Care Accounting Paper, University of Phoenix - Create chart containing three forms of business organization

Determining the risk of the portfolio : The Bank of Tinytown can only approve two loans but has four loans that the credit department has identified. Given the data presented in Table 1 what are the e

Perform an internet search of yourself : If your potential employer were to see your posts, what impression would they get? Perform an internet search of yourself...did anything interesting come up?

Why is decision making important in public administration : Why is decision making important in public administration? Discuss in detail the steps involved in decision making process.

What are the alternatives and are the alternatives viable : What are the alternatives and are the alternatives viable? Have you seen any of the alternatives in use? Do you use any of the alternatives?

Theoretical models of decision making : Read chapter: Public Decision Making Discuss in detail the following Theoretical Models of Decision Making. 1. "Rational Model." 2. "Participatory Model."

User Account

All Pages

Determining the risk of the portfolio

Reference no: EM133204997

Reference no: EM133204997

Questions Cloud

Reviews

Write a Review

Cost Accounting Questions & Answers

Compute variable-overhead spending variance

Design a store ledger card using last in first out

How much overhead will be assigned to each product

Forrests gameboards company manufactures games in 3

Find what is an investment centre

Describe how the suggested cost driver might work

Throw back into cost of goods sold and why bother

How the note is issued at

Journalize adjusting entries and analyze effects

Evaluate the fixed portion of the electrical cost

What is the amount of the factory overhead variance

Hand-made furniture company manufactures sofas for

Assured A++ Grade

Academics

Major Subjects

Majors

Get In Touch

TERMS & POLICIES

HELP & SUPPORT