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

Find the derivations of functions, Find the derivatives of each of the foll...

Find the derivatives of each of the following functions, and their points of maximization or minimization if possible. a.  TC = 1500 - 100 Q + 2Q 2 b.  ATC = 1500/Q - 100 +

Build upon the childs background with maths, BUILD UPON THE CHILDS BACKGROU...

BUILD UPON THE CHILDS BACKGROUND :  As you read in previous, each child is unique. Individual children vary in age, level of cognition, background, etc. What implications does thi

John and charlie have a whole of 80 dollars he has x dollar, John and Charl...

John and Charlie have a whole of 80 dollars. John has x dollars. How much money does Charlie have? This problem translates to the expression 42 + (11 - 9) ÷ 2. Using order of o

Linear programming Special purpose of algorithm, the conclusion about stepp...

the conclusion about stepping stone method in real life situation?

Three dimensional geometry, Three Dimensional geometry Intorduction ...

Three Dimensional geometry Intorduction In earlier classes we studied about the coordinates in two planes that is the XY plane. Here we are going to study in detail about th

Rejection and acceptance regions, Rejection and Acceptance regions All ...

Rejection and Acceptance regions All possible values which a test statistic may either suppose consistency along with the null hypothesis as acceptance region or lead to the re

Demand Forecast, How should shoppers Stop develop its demand forecasts?

How should shoppers Stop develop its demand forecasts?

Definition of infinite limits, Infinite limits : Let's now move onto the d...

Infinite limits : Let's now move onto the definition of infinite limits. Here are the two definitions which we have to cover both possibilities, limits which are positive infinity

Machines, descuss the seauencing problem for n jobs on two and three machin...

descuss the seauencing problem for n jobs on two and three machines

Example of 3-d coordinate system, Example of 3-D Coordinate System Exam...

Example of 3-D Coordinate System Example: Graph x = 3 in R, R 2 and R 3 .   Solution In R we consist of a single coordinate system and thus x=3 is a point in a 1-D co

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