Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Suppose you are a US investor looking for international diversification opportunities. Your investment advisor offers you an international equity index that expects annual returns of 18%, but the volatility of these returns is 48%. This international index comprises other developed countries as well as some emerging economies. The expected returns, volatility, and correlations are provided below:
Risk-Free Rate
US Equity Index Returns (annual)
International Equity Index Returns (annual)
Expected Returns
3%
8%
18%
Std. Deviation (Volatility)
0%
48%
Correlation US Equity Index
0
1
0.4
Correlation International Equity Index
d. Suppose your investment advisor suggests adding the risk-free asset to the portfolio. In other words, your investment advisor recommends you to have a portfolio with three assets: risk-free rate, US equity index, and the International Equity Index. Using the following weights of the risk-free asset as the initial guess, estimate the portfolios that maximize the Sharpe ratios of those portfolios.
Risk-free asset
US Equity index returns (Weight)
International Equity index returns (Weight)
Portfolio Standard Deviation
Slope of CAL (Sharpe Ratio)
100%
2
80%
3
60%
4
40%
5
20%
6
e. Finally, suppose you do not use the weights for the risk-free asset in part d, but any other number you want to assume (as long as the weights of the 3-assets add up to 1). Find a portfolio that maximizes the Sharpe ratio?
Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..
This report is specific for a core understanding for Financial Accounting and its relevant factors.
Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.
Briefly describe the major differences between a sole proprietorship and a corporation
Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month
What are the implied interest rates in Europe and the U.S.?
State pricing theory and no-arbitrage pricing theory
Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.
The Effect of Financial Leverage and working capital management
Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.
Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.
Time Value of Money project
Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd