Maximizing return ratio, If you have a certain amount of

Maximizing return ratio

Assignment Help Macroeconomics

Reference no: EM1368510

If you have a certain amount of money invested in the stock market for a moment of time, then there is an expected return on that investment (the stock market goes up on average), and a risk, a variance in that return (the stock market flucuates), both of which are proportional to the amount you have invested. As those moments of time are strung together, the expected returns for the different moments add, while the risks (since they are independent from one moment to the next) combine as square root of sum of squares. You have $10,000 to invest over one year. How should you allocate your investment over time to maximize your return/risk ratio?

Reference no: EM1368510

Questions Cloud

Explain employer and the privacy concerns of the employees : Be ensure to take into account both the needs of the employer as well as the privacy concerns of the employees.

Discuss advantages and disadvantages of product development : In 1990s, Chrysler Company placed nearly all decisions about the development of a new vehicle in the hands of a single, cross functional product team.

Approach to system development to define large project : Third approach to system development might be to define one large project which will use iterative approach to the SDLC. Briefly explain what you would include in each iteration.

Explain the four factors of the fair use doctrine : Explain the four factors of the fair use doctrine that the court would consider in determining whether Valeria infringed on the copyright of the publisher of the pamphlet. Did she infringe?

Maximizing return ratio : If you have a certain amount of money invested in stock market for a moment of time, then there is an expected return on that investment, and a risk, a variance in that return, both of which are proportional to the amount you have invested.

Explain claudia was forced to detour around a snow-covered : Explain Claudia was forced to detour around a snow-covered sidewalk in front of her neighbor's house

Explain carlos allegedly orally agreed to sell to juan : Explain Carlos allegedly orally agreed to sell to Juan for $500,000 the Ferrari once owned by King Leopold of Belgium

Explain how do vision and mission development : Explain How do vision and mission development and communication "guide" the organization in a manner which is congruent with the strategy of the organization?

Cryptography and network security : CS 470: Cryptography and Network Security, Compare the RSA and EIGamal signature schemes' performance in terms of efficiency of the verification operation, ability to pre-compute most of the signature operation in advance.

User Account

All Pages