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 PROGRAMMING, Richland Health has three hospitals in the greater Tamp...

Richland Health has three hospitals in the greater Tampa, Florida area. Demand for patient services varies considerably during the fall and winter months due to the temporary influ

To calculate volume of cylinder which formula is used, Mimi is filling a te...

Mimi is filling a tennis ball can along with water. She wants to know the volume of the cylinder shaped can. Which formula will she use? The volume of a cylinder is π times the

Negative number, what should added to the sum of (-26) and 31 to m...

what should added to the sum of (-26) and 31 to make it equal to the sum of (-35) and (-11) question #Minimum 100 words accepted#

Translate the formula into prefix form, Translate the following formula int...

Translate the following formula into a prefix form expression in Scheme: 5+4*(6-7/5)/3(14-5)(3+1)

F distribution, The F Distribution The F distribution is the dis...

The F Distribution The F distribution is the distribution of the ratio of 2 random variables. Both random variables have yet another distribution, called the c 2 Distri

How far is that person from the starting point, A person travels 10 miles d...

A person travels 10 miles due north, 6 miles due west, 4 miles due north, and 12 miles due east. How far is that person from the initail state? a. 23 miles northeast b. 13 mi

Word problem, a recipe good for 4 servings require 1/8 tsp. black pepper an...

a recipe good for 4 servings require 1/8 tsp. black pepper and 1/2 tsp. of salt. how much black pepper and how much salt needed for 2 servings?

Use the definition of the right- and left-handed limits, Use the definition...

Use the definition of the limit to prove the given limit. Solution Let ε> 0 is any number then we have to find a number δ > 0 so that the following will be true. |

Solving a system of 2 equations addition-subtraction method, Solving a Syst...

Solving a System of 2 Equations Using the Addition/Subtraction Method To solve a system of linear equations using the addition/subtraction method, both equations should first b

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