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

Aggregation and augmentation, Previously discussed how important it is to e...

Previously discussed how important it is to expose children to a variety of verbal problems involving the concept that they are trying to learn. Children attach meaning to the abst

Irregular shapes and solids, find the area of the irregular shape 2cm 4cm 4...

find the area of the irregular shape 2cm 4cm 4cm 2cm 5cm 5cm

Ascending order, arrange these numbers in ascending order. -5 -7 1 2 15 0 -...

arrange these numbers in ascending order. -5 -7 1 2 15 0 - 25

Determines the first four derivatives of y = cos x, Example    determines t...

Example    determines the first four derivatives for following.                                                                  y = cos x Solution: Again, let's just do so

Implement immutable data type rational for rational number, Implement an im...

Implement an immutable data type Rational for rational numbers that supports addition, subtraction, multiplication and division. public class Rational Ration

Find the sides of hypotenuse , The hypotenuse of a right triangle is 20m. ...

The hypotenuse of a right triangle is 20m. If the difference between the length of the other sides is 4m. Find the sides. Ans: APQ x 2 + y 2 = 202 x 2  + y 2 = 400

Probability, julie has 3 hats and 5 scarves. How many ways can she wear a h...

julie has 3 hats and 5 scarves. How many ways can she wear a hat and a scarf?

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