Discuss any benefits of diversification achieved

Assignment Help Business Management

Reference no: EM13105597

Q. a. Compute the expected portfolio return, rp, for each of the 6 years.

b. Compute the average expected portfolio return, rp, over the 6-year period.

c. Compute the standard deviation of expected portfolio returns, sp over the 6-year period.

d. Explain how would you characterize the correlation of returns of the two assets L and M?

e. Discuss any benefits of diversification achieved through creation of the portfolio.

f. Assume that asset L represent 60% of the portfolio and asset M 40%. Compute the average expected return and standard deviation of expected portfolio returns over the 6-year period. Compare your answers to the answers from part b. and c.

Reference no: EM13105597

Questions Cloud

Illustrate what are requirements for agency interns : Illustrate what are Requirements for agency interns. Are there any Ethical dilemmas that are faced by the specific services provided by this agency and Legal requirements placed on the agency.

Confidence interval estimation for proportion : A local health center noted that in a sample of 400 patients 80 were referred to them by the local hospital. What size sample would be required to estimate the proportion of hospital referrals with a margin of error of 0.04 or less at 95% confiden..

What are the training needs in pepsi company : Prepare a 400 word paper utilizing a Learning Team member's organization or one with which you are familiar as well as have access to the necessary information in order to identify an issue that can be improved by developing a training program. Us..

Mean of sampling distribution of sample-mean : Random samples of size 64 are taken from a large population whose mean is 160 and whose standard deviation is 25. What is the mean of the sampling distribution of the sample mean?

Discuss any benefits of diversification achieved : Explain how would you characterize the correlation of returns of the two assets L and M? Discuss any benefits of diversification achieved through creation of the portfolio.

What is the crowding - out effect : Why were those who took out hybrid loans at far greater risk of foreclosure when the Fed began raising interest rates and how are each of the following events likely to affect the value of the dollar relative to the euro?

Confidence interval estimation : A group of 47 randomly selected students have a mean score of 20.2 with a standard deviation of 4.6 on a placement test. Construct a 90% confidence interval for the mean score, , of all students taking the test.

Goods want transporting in the opposite direction : Presume you are the owner driver of a truck, which transports vegetables overnight from the farmers in Florida to the markets in Atlanta.

How americans lives changed due to red scare : Themes of anti-communism preoccupied American media from 1947 to 1954. Main topics included coup in Czechoslovakia, Korean War. How Americans lives changed due to Red Scare

User Account

All Pages