How all of should be invested using portfolio theory

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Reference no: EM132031470

Top Choice Investments, one of the companies that you have been investing for, have given you £2,000,000 to invest for them. The funds can be invested in one or more projects.

These projects are all indivisible. The investors require a minimum return of 25% and they are high risk takers.

Details of the projects are as follows.

	Initial Cost (£)	Expected Return	Risk (s)
Project A	1,200,000	22%	8%
Project B	800,000	28%	10%
Project C	1,200,000	30%	15%
Project D	1,200,000	34%	17%

Correlation Co-efficients between the securities

	A	B	C	D
A	+1	+0.7	+0.6	+0.6
B	+0.7	+1	+0.65	+0.3
C	+0.6	+0.65	+1	+0.8
D	+0.6	+0.3	+0.8	+1

Required:

Advice Top Choice Investments on how all of the £2M should be invested using portfolio theory showing appropriate calculations

Reference no: EM132031470

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