Estimate the precision of h is estimation of asset value

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Reference no: EM131867954

1. Overconfident investors tend to over-estimate the precision of h is/her estimation of asset value. Which of the following phenomena is NOT likely caused by overconfidence?

A Investors appear unwilling to sell stocks that have depreciated in value but are keen to sell stocks that have increased in value since they bought them

B. Investors appear to trade much more than what would be optimal

C. Investors tend to overweight their home country in their portfolio

'D. Investors tend to invest too much into their perceived "mispriced" assets 0 E. Investors tend to hold only a few stocks in their retirement port! ?o

2. An investor's portfolio comprises of $7 million in asset A and $3 million in asset 8. Asset A has an expected return of 0.10 and a return standard deviation of 0.19, while the expected return and return standard deviation of asset 8 are 0.18 and 0.27 respectively. The estimated correlation coefficient between returns of two assets is 0.80. What is the standard deviation of the investor's portfolio return? Please round your calculation to the nearest 2nd decimal and fill in the calculated number below.( )

Reference no: EM131867954

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