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!
Question:
(a) You are given the following information on two risky assets A and B.
E(X) = 25% E(Y) = 30% Var (X) = 16% Var (Y) = 49%
The correlation matrix is ( 1 0.5) ( 1 )
Required:
(i) Find the expected return and standard deviation of returns of the minimum variance portfolio.
(ii) If the two assets X and Y are perfectly correlated, what is the expected return and standard deviation of returns for an equally weighted portfolio? State your assumptions.
(b) An individual has the following utility function u(w) = ln (w). Her initial wealth is Rs 15,000. She has the possibility of participating in the following gamble at a cost of Rs 500, with a 30% chance of winning Rs 6,000, a 50 % chance of winning Rs 1000 and a 20% chance of losing Rs2,000.
(i) If she accepts the gamble, what is her expected utility of wealth? (ii) What is her certainty equivalent wealth? (iii) What is her risk premium? (iv) What is the Savage-Friedman hypothesis about? (v) If she lost in the first round, what is her expected utility in the second round? (c) If car insurance was not compulsory by law, would economic agents still buy insurance? Explain.
#Minimum 100 words accepted#
This institute is a leading oil and gas industry trade association. The American Petroleum Institute is concerned with public policy and industry lobbying efforts, health and safet
Initial investment 1950000 net cash flow 2075246 discount 15% find irr. Please solve in detail. regards thanks. .
What is the present value of the following payment stream, discounted at 7% annually: $1,200 at the end of year 1, $2,200 at the end of year 2, and $3,200 at the end of year 3?
asda
Pfizer Incorporated has 2 million shares of common stock, selling at $18 each. The β of the stock is 1.5, T-bill rate is 6%, and the expected return on the market is 12%. Pfizer al
what is a multinational corporation? Why do firms expand into other countries?
Finance There are various ways of making a payment for M&A. Cash, stock-swap and combination of both. The hybrid paying method is commonly used method for most of organisations
Source of short term finance
Cooper Toys sells a portable baby stroller called the Tot n' Trot. The past two years of demand for Tot n'Trots are shown in the table below. Use an appropriate method to forecast
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: +91-977-207-8620
Phone: +91-977-207-8620
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd