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

Calculus 1, Suppose a Ferris wheel with radius of 12 meters is rotating at ...

Suppose a Ferris wheel with radius of 12 meters is rotating at a rate of 2 rotations per minute. a. How fast is a person rising when the person is 3 meters above the horizontal lin

Trignometric function, If tanx+secx=sqr rt 3, 0 Ans) sec 2 x=(√3-tanx) 2...

If tanx+secx=sqr rt 3, 0 Ans) sec 2 x=(√3-tanx) 2 1+tan 2 x=3+tan 2 x-2√3tanx 2√3tanx=2 tanx=1/√3 x=30degree

Define markov process, Define Markov process. Markov process is one in...

Define Markov process. Markov process is one in which the future value is independent of the past values, given the current value

Sketch the plot first-order integrated rate, Show that the first-order inte...

Show that the first-order integrated rate expression can be written as [A] t = [A] 0 e -n(in)t where n represents the number of elapsed halftimes. Sketch the plot of [A] 1

What is uniform distribution, Q. What is Uniform Distribution? Ans. ...

Q. What is Uniform Distribution? Ans. A distribution is the set of possible values of a random variable considered in terms of their theoretical or observed frequency. Th

Sets, What is the subset of {a,b,c}

What is the subset of {a,b,c}

Define combined functions, Q. Define Combined Functions? Ans. We a...

Q. Define Combined Functions? Ans. We are often interested in functions which combine a trigonometric function with another type of function.  For example, y = x + sinx wi

Draw a common graph ( x - 2)2 /9+4(y + 2)2 =1, Graph     ( x - 2) 2 /9+4...

Graph     ( x - 2) 2 /9+4(y + 2) 2  = 1 Solution It is an ellipse. The standard form of the ellipse is                                                         ( x - h

Harmonic mean, If a, b and c are in harmonic progression with b as th...

If a, b and c are in harmonic progression with b as their harmonic mean then, b  = This is obtained as follows. Since a, b and c are in

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