Management, Mathematics

Assignment Help:
An investment manager at TD Ameritrade is making a decision about a $10,000,000 investment. There are four portfolio options available and she is looking at annual return of these portfolios to choose one. Market has four possible situations: bad, average, good, and excellent. Each portfolio may have a different estimated rate of return under a known market situation. For “Bad”, “Average”, “Good”, and “Excellent” market, “Option 1” has return rates of 33%, 28%, 1%, and loss of 15% respectively. These numbers are 22%, 12%, 17%, and loss of 5% for “Option 2”, 8%, 9%, 14%, and 16% for “Option 3”, and finally for “Option 4” these rates are loss of 2%, 5%, 12%, and 35% under “Bad”, “Average”, “Good”, and “Excellent” market situations.
a. Compare the outcomes for all portfolios under any market situation. What is the best portfolio under Minimax Regret rule?
b. Does the outcome change if the investment decision was made based on the expected value of portfolios? Why? Probabilities for bad, average, good, and excellent market situations are 35%, 22%, 25%, and 18% respectively.


Related Discussions:- Management

Linear graph, in the form of linear graph interpret the ralationship betwee...

in the form of linear graph interpret the ralationship between two quantities

Differential equation - variation of parameters, Variation of Parameters ...

Variation of Parameters Notice there the differential equation, y′′ + q (t) y′ + r (t) y = g (t) Suppose that y 1 (t) and y 2 (t) are a fundamental set of solutions for

Inequalality, the low temperature in onw city was -4degrees Fahrenheit. The...

the low temperature in onw city was -4degrees Fahrenheit. The low temperature in another city was 8degrees Fahrenheit. what is an inequality to compare those temperatures

Example of inflection point - set theory and calculus, Need help, Determine...

Need help, Determine the points of inflection on the curve of the function y = x 3

The laplace method, The Laplace method Laplace method employs all the i...

The Laplace method Laplace method employs all the information by assigning equal probabilities to the possible payoffs for every action and then selecting such alternative whic

Modi method, why modi method is used in operation research

why modi method is used in operation research

Compound interest, principal=2000 rate=5% time=2 years find compound intere...

principal=2000 rate=5% time=2 years find compound interest

What is angles, What is Angles? An angle is made up of two rays with a ...

What is Angles? An angle is made up of two rays with a common endpoint, which is called the vertex. The sides of the angle are rays. An angle is denoted by "θ". When two li

Write Your Message!

Captcha
Free Assignment Quote

Assured A++ Grade

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!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd